Iran Sanctions

July 20, 2001 –
August 7, 2018
RS20871

The multilateral nuclear accord (Joint Comprehensive Plan of Action, or JCPOA) provided Iran broad relief from U.N. and multilateral sanctions, as well as U.S. secondary sanctions (sanctions on foreign firms that do business with Iran) on Iran’s civilian economic sectors. Upon the January 16, 2016, implementation of the JCPOA, U.S. Administration waivers of relevant sanctions laws took effect, relevant executive orders (E.O.s) were revoked, and corresponding U.N. and EU sanctions were lifted. Remaining in place were a general ban on U.S. trade with Iran and U.S. secondary sanctions imposed on Iran’s support for regional governments and armed factions, its human rights abuses, its efforts to acquire missile and advanced conventional weapons capabilities, and the Islamic Revolutionary Guard Corps (IRGC). Some additional sanctions on these entities and activities were made mandatory by the Countering America’s Adversaries through Sanctions Act (CAATSA, P.L. 115-44), which also increases sanctions on Russia and North Korea.

Under U.N. Security Council Resolution 2231, nonbinding U.N. restrictions on Iran’s development of nuclear-capable ballistic missiles and a binding ban on its importation or exportation of arms remain in place for several years. However, Iran has continued to support regional armed factions and to develop ballistic missiles despite the U.N. restrictions, and did so even when strict international economic sanctions were in place during 2010-2015.

On May 8, 2018, President Trump announced that the United States would no longer participate in the JCPOA and that all U.S. secondary sanctions suspended to implement the JCPOA would be reimposed after a maximum “wind-down period” of 180 days (November 4, 2018). Some of the sanctions, but not on energy or banking transactions, went back into effect after a 90 day wind down period (August 6). The Administration has indicated it will not look favorably on requests by foreign governments or companies for exemptions to allow them to avoid penalties for continuing to do business with Iran after that time. U.S. licenses for the sale by Airbus and Boeing of commercial aircraft to Iran Air and other Iranian airlines have been revoked, causing cancellations of sales.

It remains uncertain whether reimposed U.S. sanctions based on the U.S. unilateral exit from the JCPOA will damage Iran’s economy to the extent sanctions did during 2012-2015, when the global community was relatively united in pressuring Iran. During that timeframe, Iran’s economy shrank by 9% per year, crude oil exports fell from about 2.5 million barrels per day (mbd) to about 1.1 mbd, and Iran could not repatriate more than $120 billion in Iranian reserves held in banks abroad. JCPOA sanctions relief enabled Iran to increase its oil exports to nearly presanctions levels, regain access to foreign exchange reserve funds and reintegrate into the international financial system, achieve about 7% yearly economic growth, attract foreign investments in key sectors, and buy new passenger aircraft. The sanctions relief contributed to Iranian President Hassan Rouhani’s reelection in the May 19, 2017, vote. Yet, perceived economic grievances still sparked protests in December 2017-January 2018.

Even though the U.S. exit from the JCPOA was supported by only a few countries in the region, the reimposition of U.S. sanctions has begun to harm Iran’s economy because numerous major companies have announced decisions to exit the Iranian economy rather than risk being penalized by the United States. As an indicator of the effects, the value of Iran’s currency sharply declined in June 2018, and economic-based unrest has continued, although not nearly to the point where the regime’s grip on power is threatened. If the European Union and other countries are unwilling or unable to keep at least the bulk of the economic benefits of the JCPOA flowing to Iran, there is substantial potential for Iranian leaders to decide to cease participating in the JCPOA.

See also CRS Report R43333, Iran Nuclear Agreement and U.S. Exit, by Paul K. Kerr and Kenneth Katzman; and CRS Report R43311, Iran: U.S. Economic Sanctions and the Authority to Lift Restrictions, by Dianne E. Rennack.

Summary

The multilateral nuclear accord (Joint Comprehensive Plan of Action, or JCPOA) provided Iran broad relief from U.N. and multilateral sanctions, as well as U.S. secondary sanctions (sanctions on foreign firms that do business with Iran) on Iran's civilian economic sectors. Upon the January 16, 2016, implementation of the JCPOA, U.S. Administration waivers of relevant sanctions laws took effect, relevant executive orders (E.O.s) were revoked, and corresponding U.N. and EU sanctions were lifted. Remaining in place were a general ban on U.S. trade with Iran and U.S. secondary sanctions imposed on Iran's support for regional governments and armed factions, its human rights abuses, its efforts to acquire missile and advanced conventional weapons capabilities, and the Islamic Revolutionary Guard Corps (IRGC). Some additional sanctions on these entities and activities were made mandatory by the Countering America's Adversaries through Sanctions Act (CAATSA, P.L. 115-44), which also increases sanctions on Russia and North Korea.

Under U.N. Security Council Resolution 2231, nonbinding U.N. restrictions on Iran's development of nuclear-capable ballistic missiles and a binding ban on its importation or exportation of arms remain in place for several years. However, Iran has continued to support regional armed factions and to develop ballistic missiles despite the U.N. restrictions, and did so even when strict international economic sanctions were in place during 2010-2015.

On May 8, 2018, President Trump announced that the United States would no longer participate in the JCPOA and that all U.S. secondary sanctions suspended to implement the JCPOA would be reimposed after a maximum "wind-down period" of 180 days (November 4, 2018). Some of the sanctions, but not on energy or banking transactions, went back into effect after a 90 day wind down period (August 6). The Administration has indicated it will not look favorably on requests by foreign governments or companies for exemptions to allow them to avoid penalties for continuing to do business with Iran after that time. U.S. licenses for the sale by Airbus and Boeing of commercial aircraft to Iran Air and other Iranian airlines have been revoked, causing cancellations of sales.

It remains uncertain whether reimposed U.S. sanctions based on the U.S. unilateral exit from the JCPOA will damage Iran's economy to the extent sanctions did during 2012-2015, when the global community was relatively united in pressuring Iran. During that timeframe, Iran's economy shrank by 9% per year, crude oil exports fell from about 2.5 million barrels per day (mbd) to about 1.1 mbd, and Iran could not repatriate more than $120 billion in Iranian reserves held in banks abroad. JCPOA sanctions relief enabled Iran to increase its oil exports to nearly presanctions levels, regain access to foreign exchange reserve funds and reintegrate into the international financial system, achieve about 7% yearly economic growth, attract foreign investments in key sectors, and buy new passenger aircraft. The sanctions relief contributed to Iranian President Hassan Rouhani's reelection in the May 19, 2017, vote. Yet, perceived economic grievances still sparked protests in December 2017-January 2018.

Even though the U.S. exit from the JCPOA was supported by only a few countries in the region, the reimposition of U.S. sanctions has begun to harm Iran's economy because numerous major companies have announced decisions to exit the Iranian economy rather than risk being penalized by the United States. As an indicator of the effects, the value of Iran's currency sharply declined in June 2018, and economic-based unrest has continued, although not nearly to the point where the regime's grip on power is threatened. If the European Union and other countries are unwilling or unable to keep at least the bulk of the economic benefits of the JCPOA flowing to Iran, there is substantial potential for Iranian leaders to decide to cease participating in the JCPOA.

Overview and Objectives

U.S. sanctions—and U.S. attempts to achieve imposition of multilateral and international sanctions on Iran—have been a significant component of U.S. Iran policy for several decades. In the 1980s and 1990s, U.S. sanctions were intended to try to compel Iran to cease supporting acts of terrorism and to limit Iran's strategic power in the Middle East more generally. After the mid-2000s, U.S. and international sanctions focused largely on ensuring that Iran's nuclear program is for purely civilian uses. During 2010-2015, the international community cooperated closely with a U.S.-led and U.N.-authorized sanctions regime in pursuit of the goal of persuading Iran to agree to limits to its nuclear program. Still, sanctions against Iran have multiple objectives and address multiple perceived threats from Iran simultaneously.

This report analyzes U.S. and international sanctions against Iran. CRS has no way to independently corroborate whether any individual or other entity might be in violation of U.S. or international sanctions against Iran. The sections below are grouped by function, in the chronological order in which these themes have emerged.1

Blocked Iranian Property and Assets

Post-JCPOA Status: Iranian Assets Still Frozen, but Some Issues Resolved

U.S. sanctions on Iran were first imposed during the U.S.-Iran hostage crisis of 1979-1981, in the form of executive orders issued by President Jimmy Carter blocking nearly all Iranian assets held in the United States. Many of these assets were unblocked by subsequent orders when the crisis was resolved in early 1981 in accordance with the "Algiers Accords." Assets still frozen are analyzed below.

U.S.-Iran Claims Tribunal

The Accords established a "U.S.-Iran Claims Tribunal" at the Hague that continues to arbitrate cases resulting from the 1980 break in relations and freezing of some of Iran's assets. All of the 4,700 private U.S. claims against Iran were resolved in the first 20 years of the Tribunal, resulting in $2.5 billion in awards to U.S. nationals and firms.

The major government-to-government cases involved Iranian claims for compensation for hundreds of foreign military sales (FMS) cases that were halted in concert with the rift in U.S.-Iran relations when the Shah's government fell in 1979. In 1991, the George H. W. Bush Administration paid $278 million from the Treasury Department Judgment Fund to settle FMS cases involving weapons Iran had received but which were in the United States undergoing repair and impounded when the Shah fell.

On January 17, 2016, the day after Implementation Day of the JCPOA, the United States announced it had settled with Iran for FMS cases involving weaponry the Shah was paying for (fund deposited into a DOD-managed "Iran FMS Trust Fund") but were not completed and delivered to Iran when the Shah fell. The Trust Fund had a balance after 1990 - the year $200 million was paid to Iran to settle some FMS cases - of about $400 million. Under the 2016 settlement, the United States sent Iran the $400 million balance in Trust Fund plus $1.3 billion in accrued interest, paid from the Department of the Treasury's "Judgment Fund." In order not to violate U.S. regulations barring direct U.S. dollar transfers to Iranian banks, the funds were remitted to Iran in late January and early February 2016 in foreign hard currency from the central banks of the Netherlands and of Switzerland. Some remaining claims involving the FMS program with Iran remain under arbitration at the Tribunal.

Other Iranian Assets Frozen

Iranian assets in the United States are blocked under several provisions, including Executive Order 13599 of February 2010. The United States did not commit to unblock any of these assets under the JCPOA. About $2.1 billion in blocked Iranian assets are bonds belonging to Iran's Central Bank, frozen in a Citibank account in New York since 2008. Another $1.6 billion in Iranian assets are being blocked in Luxembourg in connection with U.S. assertions that Clearstream, a Luxembourg-based securities intermediary, had improperly allowed those funds to access the U.S. financial system. About $50 million of Iran's assets frozen in the United States consists of Iranian diplomatic property and accounts, including the former Iranian embassy in Washington, DC, and 10 other properties in several states, along with related bank accounts.2

Among other frozen Iranian assets are real estate holdings of the Assa Company, a UK-chartered entity, which allegedly was maintaining the interests of Iran's Bank Melli in a 36-story office building in New York City and several other properties around the United States (in Texas, California, Virginia, Maryland, and other parts of New York City). An Iranian foundation, the Alavi Foundation, allegedly is an investor in the properties. The U.S. Attorney for the Southern District of New York blocked these properties in 2009. The Department of the Treasury report avoids valuing real estate holdings, but public sources assess these blocked real estate assets at nearly $1 billion. In June 2017, litigation won the U.S. government control over the New York City office building,

Use of Iranian Assets to Compensate U.S. Victims of Iranian Terrorism

There are a total of about $46 billion in court awards that have been made to victims of Iranian terrorism. These include the families of the 241 U.S. soldiers killed in the October 23, 1983, bombing of the U.S. Marine barracks in Beirut. U.S. funds equivalent to the $400 million balance in the DOD account (see above) have been used to pay a small portion of these judgments. The Algiers Accords apparently precluded compensation for the 52 U.S. diplomats held hostage by Iran from November 1979 until January 1981. A provision of the FY2016 Consolidated Appropriation (Section 404 of P.L. 114-113) set up a mechanism for paying damages to the U.S. embassy hostages and other victims of state-sponsored terrorism using settlement payments paid by various banks for concealing Iran-related transactions, and proceeds from other Iranian frozen assets. In April 2016, the U.S. Supreme Court determined the Central Bank assets discussed above could be used to pay the terrorism judgments, and the proceeds from the sale of the frozen real estate assets mentioned above will likely be distributed to victims of Iranian terrorism as well.3 On the other hand, in March 2018, the U.S. Supreme Court ruled that U.S. victims of an Iran-sponsored terrorist attack could not seize a collection of Persian antiquities on loan to a University of Chicago museum to satisfy a court judgment against Iran. For further information, see CRS Report RL31258, Suits Against Terrorist States by Victims of Terrorism, by [author name scrubbed] and CRS Legal Sidebar LSB10104, It Belongs in a Museum: Sovereign Immunity Shields Iranian Antiquities Even When It Does Not Protect Iran, by [author name scrubbed].

Other past financial disputes include the mistaken U.S. shoot-down on July 3, 1988, of an Iranian Airbus passenger jet (Iran Air flight 655), for which the United States paid Iran $61.8 million in compensation ($300,000 per wage-earning victim, $150,000 per nonwage earner) for the 248 Iranians killed. The United States did not compensate Iran for the airplane itself, although officials involved in the negotiations told CRS in November 2012 that the United States later arranged to provide a substitute used aircraft to Iran.

Executive Order 13599 Impounding Iran-Owned Assets

Post-JCPOA Status: Still in Effect

Executive Order 13599, issued February 5, 2012, directs the blocking of U.S.-based assets of entities determined to be "owned or controlled by the Iranian government." The order was issued to implement Section 1245 of the FY2012 National Defense Authorization Act (P.L. 112-81) that imposed secondary U.S. sanctions on Iran's Central Bank. The Order requires that any U.S.-based assets of the Central Bank of Iran, or of any Iranian government-controlled entity, be impounded by U.S. financial institutions. Even before the issuance of the Order, and in order to implement the ban on U.S. trade with Iran (see below) successive Administrations had designated many entities as "owned or controlled by the Government of Iran." The order goes beyond the regulations issued pursuant to the 1995 imposition of the U.S. trade ban with Iran, in which U.S. banks are required to refuse such transactions but to return funds to Iran.

Numerous designations have been made under Executive Order 13599, including the June 4, 2013, naming of 38 entities (mostly oil, petrochemical, and investment companies) that are components of an Iranian entity called the "Execution of Imam Khomeini's Order" (EIKO).4 EIKO was characterized by the Department of the Treasury as an Iranian leadership entity that controls "massive off-the-books investments, shielded from the view of the Iranian entities and international regulators."

Implementation of the U.S. JCPOA Withdrawal. To implement the JCPOA, many 13599-designated entities specified in the JCPOA (Attachment 3) were "delisted" from U.S. secondary sanctions (no longer considered "Specially Designated Nationals," SDNs). The delisted entities are presented in the tables at the end of the report. However, U.S. persons (or foreign entities owned or controlled by a U.S. person) continued to be prohibited from conducting transactions with these entities under Iran Transactions Regulations. The Treasury Department announced on May 8, 2018, in concert with the U.S. withdrawal from the JCPOA, that the 13599-designated entities that were delisted as SDNs will be relisted as SDNs on November 5, 2018. 5

Sanctions for Iran's Support for Terrorism and Regional Activities

Most of the hostage crisis-related sanctions were lifted upon resolution of the hostage crisis in 1981. The United States began imposing sanctions against Iran again in the mid-1980s as its support for regional groups committing acts of international terrorism increased. The Secretary of State designated Iran a "state sponsor of terrorism" on January 23, 1984, following the October 1983 bombing of the U.S. Marine barracks in Lebanon perpetrated by elements that later became Hezbollah. This designation triggers substantial sanctions on any nation so designated.

None of the laws or Executive Orders in this section were waived or revoked to implement the JCPOA.No entities discussed in this section were "delisted" from sanctions under the JCPOA.

Sanctions Triggered by Terrorism List Designation

The U.S. naming of Iran as a "state sponsor of terrorism"—commonly referred to as Iran's inclusion on the U.S. "terrorism list"—triggers several sanctions. The designation is made under the authority of Section 6(j) of the Export Administration Act of 1979 (P.L. 96-72, as amended), sanctioning countries determined to have provided repeated support for acts of international terrorism. The sanctions triggered by Iran's state sponsor of terrorism designation are as follows:

Restrictions on sales of U.S. dual use items. The restriction—a presumption of denial of any license applications to sell dual use items to Iran—is required by the Export Administration Act, as continued by executive orders under the authority of the International Emergency Economic Powers Act, IEEPA. The restrictions are enforced through Export Administration Regulations (EARs) administered by the Bureau of Industry and Security (BIS) of the Commerce Department.

Ban on direct U.S. financial assistance and arms sales to Iran. Section 620A of the Foreign Assistance Act, FAA (P.L. 87-95) and Section 40 of the Arms Export Control Act (P.L. 95-92, as amended), respectively, bar any U.S. foreign assistance to terrorism list countries. Included in the definition of foreign assistance are U.S. government loans, credits, credit insurance, and Ex-Im Bank loan guarantees. Successive foreign aid appropriations laws since the late 1980s have banned direct assistance to Iran, and with no waiver provisions.

Requirement that the United States vote to oppose multilateral lending. U.S. officials are required to vote against multilateral lending to any terrorism list country by Section 1621 of the International Financial Institutions Act (P.L. 95-118, as amended [added by Section 327 of the Anti-Terrorism and Effective Death Penalty Act of 1996 (P.L. 104-132)]). Waiver authority is provided.

Withholding of U.S. foreign assistance to countries that assist or sell arms to terrorism list countries. Under Sections 620G and 620H of the Foreign Assistance Act, as added by the Anti-Terrorism and Effective Death Penalty Act (Sections 325 and 326 of P.L. 104-132), the President is required to withhold foreign aid from any country that aids or sells arms to a terrorism list country. Waiver authority is provided. Section 321 of that act makes it a crime for a U.S. person to conduct financial transactions with terrorism list governments.

Withholding of U.S. Aid to Organizations That Assist Iran. Section 307 of the FAA (added in 1985) names Iran as unable to benefit from U.S. contributions to international organizations, and require proportionate cuts if these institutions work in Iran. For example, if an international organization spends 3% of its budget for programs in Iran, then the United States is required to withhold 3% of its contribution to that international organization. No waiver is provided for.

Exception for U.S. Humanitarian Aid

The terrorism list designation, and other U.S. sanctions laws barring assistance to Iran, do not bar U.S. disaster aid. The United States donated $125,000, through relief agencies, to help victims of two earthquakes in Iran (February and May 1997); $350,000 worth of aid to the victims of a June 22, 2002, earthquake; and $5.7 million in assistance for victims of the December 2003 earthquake in Bam, Iran, which killed as many as 40,000 people. The U.S. military flew in 68,000 kilograms of supplies to Bam.

Requirements for Removal from Terrorism List

Terminating the sanctions triggered by Iran's terrorism list designation would require Iran's removal from the terrorism list. The Arms Export Control Act spells out two different requirements for a President to remove a country from the list, depending on whether the country's regime has changed.

If the country's regime has changed: the President can remove a country from the list immediately by certifying that regime change in a report to Congress.

If the country's regime has not changed: the President must report to Congress 45 days in advance of the effective date of removal. The President must certify that (1) the country has not supported international terrorism within the preceding six months, and (2) the country has provided assurances it will not do so in the future. In this latter circumstance, Congress has the opportunity to block the removal by enacting a joint resolution to that effect. The President has the option of vetoing the joint resolution, and blocking the removal would require a veto override.

Sanctions on States Designated as "Not Cooperating" Against Terrorism

Section 330 of the Anti-Terrorism and Effective Death Penalty Act (P.L. 104-132) added a Section 40A to the Arms Export Control Act that prohibits the sale or licensing of U.S. defense articles and services to any country designated (by each May 15) as "not cooperating fully with U.S. anti-terrorism efforts." The President can waive the provision upon determination that a defense sale to a designated country is "important to the national interests" of the United States.

Every May since the enactment of this law, Iran has been designated as a country that is "not fully cooperating" with U.S. antiterrorism efforts. However, the effect of the designation is largely mooted by the many other authorities that prohibit U.S. defense sales to Iran.

Executive Order 13224 Sanctioning Terrorism-Supporting Entities

Executive Order 13324 (September 23, 2001) mandates the freezing of the U.S.-based assets of and a ban on U.S. transactions with entities determined by the Administration to be supporting international terrorism. This order was issued two weeks after the September 11, 2001, attacks on the United States, under the authority of the IEEPA, the National Emergencies Act, the U.N. Participation Act of 1945, and Section 301 of the U.S. Code, initially targeting Al Qaeda.

Use of the Order to Target Iranian Arms Exports

E.O. 13224 is not specific to Iran and does not explicitly target Iranian arms exports to movements, governments, or groups in the Middle East region. However, successive Administrations have used the Order—and the orders discussed immediately below—to sanction such Iranian activity by designating persons or entities that are involved in the delivery or receipt of such weapons shipments. Some persons and entities that have been sanctioned for such activity were involved in deliveries to groups such as the Afghan Taliban organization and the Houthi rebels in Yemen that are not named as terrorist groups by the United States.

Application to the Revolutionary Guard by the Countering America's Adversaries through Sanctions Act (CAATSA, P.L. 115-44)

Section 105 of CAATSA, signed on August 2, 2017, mandates the imposition of E.O. 13324 penalties on the Islamic Revolutionary Guard Corps (IRGC) and its officials, agents, and affiliates by October 30, 2017 (90 days after enactment). The IRGC was named as a terrorism-supporting entity under E.O 13224 within that deadline. The Treasury Department made the designation of the IRGC as a terrorism-supporting entity under that E.O. on October 13, 2017.

Implementation

As noted, no entities designated under E.O. 13224 were delisted to implement the JCPOA. Additional Iran-related entities have been designated under the Order since JCPOA implementation, as shown in the table at the end of this report.

Executive Orders Sanctioning Iran's Involvement in Iraq and Syria

Some sanctions have been imposed to try to curtail Iran's destabilizing influence in the region.

Executive Order 13438. Issued on July 7, 2007, the order sanctions persons who are determined by the Administration to be posing a threat to Iraqi stability, presumably by providing arms or funds to Shiite militias there. Persons sanctioned under the order include IRGC-Qods Force officers, Iraqi Shiite militia-linked figures, and other entities. The order remains in effect even though many of the entities sanctioned worked to defeat the Islamic State in Iraq.

Executive Order 13572. Issued on April 29, 2011, the order sanctions those individuals determined to be responsible for human rights abuses and repression of the Syrian people. The IRGC-Qods Force (IRGC-QF), IRGC-QF commanders and others are sanctioned under this order.

Ban on U.S. Trade and Investment with Iran

Status: Trade Ban Eased for JCPOA, but Easing Reversed on August 6, 2018

In 1995, the Clinton Administration expanded U.S. sanctions against Iran by issuing Executive Order 12959 (May 6, 1995) banning U.S. trade with and investment in Iran. The order was issued under the authority primarily of the International Emergency Economic Powers Act (IEEPA, 50 U.S.C. 1701 et seq.),6 which gives the President wide powers to regulate commerce with a foreign country when a "state of emergency" is declared in relations with that country. E.O. 12959 superseded Executive Order 12957 (March 15, 1995) barring U.S. investment in Iran's energy sector, which accompanied President Clinton's declaration of a "state of emergency" with respect to Iran. Subsequently, E.O 13059 (August 19, 1997) added a prohibition on U.S. companies' knowingly exporting goods to a third country for incorporation into products destined for Iran. Each March since 1995, the U.S. Administration has renewed the "state of emergency" with respect to Iran. IEEPA gives the President the authority to alter regulations to license transactions with Iran - regulations enumerated in Section 560 of the Code of Federal Regulations (Iranian Transactions Regulations, ITRs).

Section 103 of the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (CISADA, P.L. 111-195) codified the trade ban and reinstated the full ban on imports that was relaxed by April 2000 regulations that allowed importation into the United States of Iranian nuts, fruit products (such as pomegranate juice), carpets, and caviar. U.S. imports from Iran after that time were negligible.7CISADA also exempted from the trade ban (1) information technology to support personal communications among the Iranian people; (2) goods to allow civilian aircraft to fly safely; and (3) goods for supporting democracy in Iran. Section 101 of the Iran Freedom Support Act (P.L. 109-293) separately codified the ban on U.S. investment in Iran, but gives the President the authority to terminate this sanction if he notifies Congress 15 days in advance (or 3 days in advance if there are "exigent circumstances").

JCPOA-Related Easing and Reversal

In accordance with the JCPOA, the ITRs were relaxed to allow U.S. importation of the Iranian luxury goods discussed above (carpets, caviar, nuts, etc.), but not to permit general U.S.-Iran trade. U.S. regulations were also altered to permit the sale of commercial aircraft to Iranian airlines that are not designated for sanctions. The modifications were made in the Departments of State and of the Treasury guidance issued on Implementation Day and since.8

In concert with the May 8 U.S. withdrawal from the JCPOA, the easing of the regulations to allow for importation of Iranian carpets and other luxury goods were reversed on August 6, 2018. Licensing of civil aviation equipment, except for safety, will end by November 5. Also by that date, the specific licenses issued to Boeing and Airbus to sell commercial aircraft to Iran Air and other Iranian airlines will be revoked.

What U.S.-Iran Trade Is Allowed or Prohibited?

The following provisions apply to the U.S. trade ban on Iran as specified in regulations (Iran Transaction Regulations, ITRs) written pursuant to the executive orders and laws discussed above and enumerated in regulations administered by the Office of Foreign Assets Control (OFAC) of the Department of the Treasury.

Oil Transactions. All U.S. transactions with Iran in energy products are banned. The 1995 trade ban (E.O. 12959) expanded a 1987 ban on imports from Iran that was imposed by Executive Order 12613 of October 29, 1987. The earlier import ban, authorized by Section 505 of the International Security and Development Cooperation Act of 1985 (22 U.S.C. 2349aa-9), barred the importation of Iranian oil into the United States but did not ban the trading of Iranian oil overseas. The 1995 ban prohibits that activity explicitly, but provides for U.S. companies to apply for licenses to conduct "swaps" of Caspian Sea oil with Iran. These swaps have been prohibited in practice; a Mobil Corporation application to do so was denied in April 1999, and no applications have been submitted since.

The ITRs do not ban the importation, from foreign refiners, of gasoline or other energy products in which Iranian oil is mixed with oil from other producers. The product of a refinery in any country is considered to be a product of the country where that refinery is located, even if some Iran-origin crude oil is present.

Transshipment and Brokering. The ITRs prohibit U.S. transshipment of prohibited goods across Iran, and ban any activities by U.S. persons to broker commercial transactions involving Iran.

Iranian Luxury Goods. Pursuant to the JCPOA, Iranian luxury goods, such as carpets and caviar, could be imported into the United States after January 2016. This prohibition went back into effect on August 6, 2018 (90-day wind down).

Shipping Insurance. Obtaining shipping insurance is crucial to Iran's expansion of its oil and other exports. A pool of 13 major insurance organizations, called the International Group of P & I Clubs, dominates the shipping insurance industry and is based in New York. The U.S. presence of this pool renders it subject to the U.S. trade ban, which complicated Iran's ability to obtain reinsurance for Iran's shipping after Implementation Day. On January 16, 2017, the Obama Administration issued waivers of Sections 212 and 213 of the ITRSHRA to allow numerous such insurers to give Iranian ships insurance.9 However, this waiver ended on August 6, 2018 (90-day wind-down).

Civilian Airline Sales. The ITRs have always permitted the licensing of goods related to the safe operation of civilian aircraft for sale to Iran (§560.528 of Title 31, C.F.R.), and spare parts sales were licensed periodically. However, from June 2011 until Implementation Day, Iran's largest state-owned airline, Iran Air, was sanctioned under Executive Order 13382 (see below), rendering licensing of parts or repairs for that airline impermissible, and several other Iranian airlines also remain sanctioned under that and Executive Order 13224. In accordance with the JCPOA, the United States relaxed restrictions on to allow for the sale to Iran of finished commercial aircraft, including to Iran Air (which was "delisted" in accordance with the JCPOA).10 A March 2016 general license allowed for U.S. aircraft and parts suppliers to negotiate sales with Iranian airlines that are not sanctioned, and Boeing and Airbus subsequently concluded major sales to Iran Air. In keeping with the May 8, 2018, U.S. withdrawal from the JCPOA, preexisting licensing restrictions went back into effect on August 6, 2018, and the licenses issued to Boeing and Airbus for aircraft sales to Iran are revoked.

Personal Communications, Remittances, and Publishing. The ITRs permit personal communications (phone calls, emails) between the United States and Iran, personal remittances to Iran, and Americans to engage in publishing activities with entities in Iran (and Cuba and Sudan). In May 2013, OFAC issued a general license for the exportation to Iran of goods (such as cell phones) and services, on a fee basis, that enhance the ability of the Iranian people to access communication technology.

Food and Medical Exports. Since April 1999, sales to Iran by U.S. firms of food and medical products have been permitted, subject to OFAC stipulations. In October 2012, OFAC permitted the sale to Iran of specified medical products, such as scalpels, prosthetics, canes, burn dressings, and other products, that could be sold to Iran under "general license" (no specific license application required). This list of general license items list was expanded in July and November 2013, and in December 201611 to include more sophisticated medical diagnostic machines and other medical equipment. Licenses for exports of medical products not on the general license list are routinely expedited for sale to Iran, according to OFAC. The regulations have a specific definition of "food" that can be licensed for sale to Iran, and that definition excludes alcohol, cigarettes, gum, or fertilizer.12 The definition addresses information in a 2010 article that OFAC had approved exports to Iran of condiments such as food additives and body-building supplements that have uses other than purely nutritive.13

Humanitarian and Related Services. Donations by U.S. residents directly to Iranian victims of natural disasters (such as mailed packages of food, toys, clothes, etc.) are not prohibited, but donations to relief organizations have generally required a specific OFAC license. On September 10, 2013, the Department of the Treasury eliminated licensing requirements for the provision to Iran, by relief organizations, of services for health projects, disaster relief, wildlife conservation, human rights projects, and activities related to sports matches and events. The amendment also allowed importation from Iran of services related to sporting activities, including sponsorship of players, coaching, referees, and training. In some cases, such as the earthquake in Bam in 2003 and the earthquake in northwestern Iran in August 2012, OFAC has issued blanket temporary general licensing for relief organizations to work in Iran.

Payment Methods, Trade Financing, and Financing Guarantees. U.S. importers are allowed to pay Iranian exporters, including with funds denominated in dollars, but funds cannot go directly to Iranian banks. Payments must pass through third-country (such as European) banks. In accordance with the ITRs' provisions that transactions that are incidental to an approved transaction are allowed, financing for approved transactions are normally approvable. Private letters of credit (from non-Iranian banks) can be used to finance approved transactions. Title IX of the Trade Sanctions Reform and Export Enhancement Act of 2000 (P.L. 106-387) bans the use of official credit guarantees (such as the Ex-Im Bank) for food and medical sales to Iran and other countries on the U.S. terrorism list, except Cuba, although allowing for a presidential waiver to permit such credit guarantees. The Ex-Im Bank is prohibited from guaranteeing any loans to Iran because of Iran's continued inclusion on the terrorism list, and the JCPOA did not commit the United States to provide credit guarantees for Iran.

Application to Foreign Subsidiaries of U.S. Firms

The ITRs do not ban subsidiaries of U.S. firms from dealing with Iran, as long as the subsidiary is not "controlled" by the parent company. Most foreign subsidiaries are legally considered foreign persons subject to the laws of the country in which the subsidiaries are incorporated. Section 218 of the Iran Threat Reduction and Syrian Human Rights Act (ITRSHRA, P.L. 112-158) holds "controlled" foreign subsidiaries of U.S. companies to the same standards as U.S. parent firms, defining a controlled subsidiary as (1) one that is more than 50% owned by the U.S. parent; (2) one in which the parent firm holds a majority on the Board of Directors of the subsidiary; or (3) one in which the parent firm directs the operations of the subsidiary. No waiver is specifically provided under Section 218.

JCPOA Regulations and Reversal. Since JCPOA implementation in 2016, the United States has licensed "controlled" foreign subsidiaries to conduct transactions with Iran that are permissible under JCPOA (almost all forms of civilian trade). The Administration asserts that the President has authority under IEEPA to license transactions with Iran, the ITRSHRA notwithstanding. This was implemented with the Treasury Department's issuance of "General License H: Authorizing Certain Transactions Relating to Foreign Entities Owned or Controlled by a United States Person."14 This licensing policy will revert to pre-JCPOA status no later than November 4, 2018, according to the Treasury Department.

Trade Ban Easing and Termination

Termination: Section 401 of the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (CISADA, P.L. 111-195) provides for the President to terminate the trade ban if the Administration certifies to Congress that Iran no longer satisfies the requirements to be designated as a state sponsor of terrorism and that Iran has ceased pursuing and has dismantled its nuclear, biological, and chemical weapons and ballistic missiles and related launch technology. Alternatively, the trade ban provision in CISADA could be repealed by congressional action.

Waiver Authority:Section 103(b)(vi) of CISADA allows the President to license exports to Iran if he determines that doing so is in the national interest of the United States. There is no similar provision in CISADA to ease the ban on U.S. imports from Iran. The State and Treasury Department guidance issued on Implementation Day asserts that the statement of licensing policy fulfills the requirements of Section 103 of CISADA.

Sanctions on Iran's Energy Sector

In 1996, Congress and the executive branch began a long process of pressuring Iran's vital energy sector in order to deny Iran the financial resources to support terrorist organizations and other armed factions or to further its nuclear and WMD programs. Iran's oil sector is as old as the petroleum industry itself (early 20th century), and Iran's onshore oil fields are in need of substantial investment. Iran has 136.3 billion barrels of proven oil reserves, the third largest after Saudi Arabia and Canada. Iran's has large natural gas resources (940 trillion cubic feet, exceeded only by Russia), but Iran's gas export sector remains small but is expanding—most of Iran's gas is injected into its oil fields to boost their production. The energy sector still generates about 20% of Iran's GDP and as much as 50% of government revenue.

Status: Virtually all the sanctions discussed in this section were waived to implement the JCPOA. U.S. sanctions on Iran's energy sector will go back into effect on November 4, 2018 (180-day wind-down period).

The Iran Sanctions Act (Including Triggers and Applications Added by CISADA, ITRSHRA, IFCA, and Other Laws)

The Iran Sanctions Act (ISA) has been a pivotal component of U.S. sanctions against Iran's energy sector. Since its enactment in 1996, ISA's provisions have been expanded and extended to other Iranian industries. ISA sought to thwart Iran's 1995 opening of the sector to foreign investment in late 1995 through a "buy-back" program in which foreign firms gradually recoup their investments as oil and gas is produced. It was first enacted as The Iran and Libya Sanctions Act (ILSA, (P.L. 104-172, signed on August 5, 1996) but was later retitled the Iran Sanctions Act after it terminated with respect to Libya in 2006. ISA was the first major "extra-territorial sanction" on Iran—a sanction that authorizes U.S. penalties against third country firms.

Key Sanctions "Triggers" Under ISA

ISA consists of a number of "triggers"—transactions with Iran that would be considered violations of ISA and could cause a firm or entity to be sanctioned under ISA's provisions. The triggers, as added by amendments over time, are detailed below:

The core trigger of ISA when first enacted was a requirement that the President sanction companies (entities, persons) that make an "investment"15 of more than $20 million16 in one year in Iran's energy sector.17 The definition of "investment" in ISA (§14 [9]) includes not only equity and royalty arrangements but any contract that includes "responsibility for the development of petroleum resources" of Iran. The definition includes additions to existing investment (added by P.L. 107-24) and pipelines to or through Iran and contracts to lead the construction, upgrading, or expansions of energy projects (added by CISADA).

Implementation: Several firms were sanctioned under ISA for investing in Iran's oil and gas fields, as discussed below.

This provision of ISA was not waived under the JCPOA and has remained active.

The Iran Freedom Support Act (P.L. 109-293, signed September 30, 2006) added Section 5(b)(1) of ISA, subjecting to ISA sanctions firms or persons determined to have sold to Iran (1) "chemical, biological, or nuclear weapons or related technologies" or (2) "destabilizing numbers and types" of advanced conventional weapons. Sanctions can be applied if the exporter knew (or had cause to know) that the end-user of the item was Iran. The definitions do not specifically include ballistic or cruise missiles, but those weapons could be considered "related technologies" or, potentially, a "destabilizing number and type" of advanced conventional weapon.

The Iran Threat Reduction and Syria Human Rights Act (ITRSHRA, P.L. 112-158, signed August 10, 2012) created Section 5(b)(2) of ISA subjecting to sanctions entities determined by the Administration to participate in a joint venture with Iran relating to the mining, production, or transportation of uranium.

Implementation: No ISA sanctions have been imposed on any entities under these provisions.

Trigger 3: Sales of Gasoline to Iran

Section 102(a) of the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (CISADA, P.L. 111-195, signed July 1, 2010) amended Section 5 of ISA to exploit Iran's dependency on imported gasoline (40% dependency at that time). It followed enacted legislation such as P.L. 111-85 that prohibited the use of U.S. funds to fill the Strategic Petroleum Reserve with products from firms that sell gasoline to Iran; and P.L. 111-117 that denies Ex-Im Bank credits to any firm that sold gasoline or related equipment to Iran. The section subjects the following to sanctions:

Sales to Iran of over $1 million worth (or $5 million in a one year period) of gasoline and related aviation and other fuels. (Fuel oil, a petroleum by-product, is not included in the definition of refined petroleum.)

Sales to Iran of equipment or services (same dollar threshold as above) which would help Iran make or import gasoline. Examples include equipment and services for Iran's oil refineries or port operations.

Implementation: Several firms were sanctioned under ISA for selling or shipping gasoline to Iran, as shown in the tables at the end of this report.

Trigger 4: Provision of Equipment or Services for Oil, Gas, and Petrochemicals Production

provide to Iran $1 million or more (or $5 million in a one year period) worth of goods or services that Iran could use to maintain or enhance its oil and gas sector. This subjects to sanctions, for example, transactions with Iran by global oil services firms and the sale to Iran of energy industry equipment such as drills, pumps, vacuums, oil rigs, and like equipment.

provide to Iran $250,000 (or $1 million in a one year period) worth of goods or services that Iran could use to maintain or expand its production of petrochemical products.18This provision was not altered by the JPA.

Implementation: Some firms were sanctioned under this provision, as shown in the tables.

Trigger 5: Transporting Iranian Crude Oil

Section 201 of the ITRSHRA amends ISA by sanctioning entities the Administration determines:

owned a vessel that was used to transport Iranian crude oil. The section also authorizes but does not require the President, subject to regulations, to prohibit a ship from putting to port in the United States for two years, if it is owned by a person sanctioned under this provision (adds Section 5[a][7] to ISA). This sanction does not apply in cases of transporting oil to countries that have received exemptions under P.L. 112-81 (discussed below).

participated in a joint oil and gas development venture with Iran, outside Iran, if that venture was established after January 1, 2002. The effective date exempts energy ventures in the Caspian Sea, such as the Shah Deniz oil field there (adds Section 5[a][4] to ISA).

Implementation. Firms sanctioned for providing ships to transport Iranian oil are in the end tables.

Separate provisions of the ITRSHR Act—which do not amend ISA—require the application of ISA sanctions (the same 5 out of 12 sanctions as required in ISA itself) on any entity that

provides insurance or reinsurance for the National Iranian Oil Company (NIOC) or the National Iranian Tanker Company (NITC) (Section 212).

purchases or facilitates the issuance of sovereign debt of the government of Iran, including Iranian government bonds (Section 213). This sanction went back into effect on August 6, 2018 (90-day wind-down period).

assists or engages in a significant transaction with the IRGC or any of its sanctioned entities or affiliates. (Section 302). This section of ITRSHRA was not waived to implement the JCPOA.

Implementation. Section 312 of ITRSHRA required an Administration determination, within 45 days of enactment (by September 24, 2012) whether NIOC and NITC are IRGC agents or affiliates. Such a determination would subject financial transactions with NIOC and NITC to sanctions under CISADA (prohibition on opening U.S.-based accounts). On September 24, 2012, the Department of the Treasury determined that NIOC and NITC are affiliates of the IRGC. On November 8, 2012, the Department of the Treasury named NIOC as a proliferation entity under Executive Order 13382—a designation that, in accordance with Section 104 of CISADA, bars any foreign bank determined to have dealt directly with NIOC (including with a NIOC bank account in a foreign country) from opening or maintaining a U.S.-based account.

Sanctions on dealings with NIOC and NITC were waived in accordance with the interim nuclear deal and the JCPOA, and designations of these entities under Executive Order 13382 were rescinded in accordance with the JCPOA. These entities will again be designated on November 5, 2018. Some NIOC partners were not sanctioned, including the Iranian Offshore Oil Company; the National Iranian Gas Export Co.; and Petroleum Engineering and Development Co. Several independent Iranian energy firms were not sanctioned, including Pasargad Oil Co., Zagros Petrochem Co., Sazeh Consultants, Qeshm Energy, and Sadid Industrial Group. Their relations with NIOC or the IRGC are unclear.

Executive Order 13622: Sanctions on the Purchase of Iranian Crude Oil and Petrochemical Products, and Dealings in Iranian Bank Notes

Status: Revoked (by E.O. 13716) but will go back into effect as stipulated below

Executive Order 13622 (July 30, 2012) imposes specified sanctions on the ISA sanctions menu, and bars banks from the U.S. financial system, for the following activities (E.O. 13622 did not amend ISA itself):

the purchase of oil, other petroleum, or petrochemical products from Iran.19The part of this order pertaining to petrochemical purchases was suspended under the JPA. The wind-down period is 180 days (November 4, 2018).

transactions with the National Iranian Oil Company (NIOC) or Naftiran Intertrade Company (NICO) (180-day wind-down period).

E.O. 13622 also blocks U.S.-based property of entities determined to have

assisted the government of Iran in the purchase of U.S. bank notes or precious metals, precious stones, or jewels. (The provision for precious stones or jewels was added to this Order by E.O. 16345 below.) (90-day wind-down period.)

E.O. 13622sanctions do not apply if the parent country of the entity has received an exemption under Section 1245 of P.L. 112-81, discussed below. An exemption also is provided for projects that bring gas from Azerbaijan to Europe and Turkey, if such project was initiated prior to the issuance of the Order.

Implementation:The firms sanctioned under this Order are in the tables at the end of this report.

Executive Order 13645: Application of ISA and Other Sanctions to Iran's Automotive Sector, Rial Trading, and Precious Stones

Post-JCPOA Status: Revoked (by E.O 13716) but will go back into effect as specified below.

Executive Order 13645 of June 3, 2013 (effective July 1, 2013), contains the provisions below. (E.O. 13645 did not amend ISA itself.)

Imposes specified ISA-related sanctions on firms that supply goods or services to Iran's automotive (cars, trucks, buses, motorcycles, and related parts) sector, and blocks foreign banks from the U.S. market if they finance transactions with Iran's automotive sector. (An executive order cannot amend a law, so the order does not amend ISA.) This provision was suspended to implement the interim nuclear deal and the JCPOA, and went back into effect on August 6, 2018.

Blocks U.S.-based property of a person that conducts transactions with an Iranian entity listed as a Specially Designated National (SDN) or Blocked Person. SDNs to be "relisted" on November 5, 2018.

Mandate and Time Frame to Investigate ISA Violations

In the original version of ISA, there was no firm requirement, and no time limit, for the Administration to investigate potential violations and determine that a firm has violated ISA's provisions. The Iran Freedom Support Act (P.L. 109-293, signed September 30, 2006) added a provision calling for, but not requiring, a 180-day time limit for a violation determination.20 CISADA (Section 102[g][5]) mandated that the Administration begin an investigation of potential ISA violations when there is "credible information" about a potential violation, and made mandatory the 180-day time limit for a determination of violation.

The Iran Threat Reduction and Syria Human Rights Act (P.L. 112-158), defines the "credible information" needed to begin an investigation of a violation to include a corporate announcement or corporate filing to its shareholders that it has undertaken transactions with Iran that are potentially sanctionable under ISA. It also says the President may (not mandatory) use as credible information reports from the Government Accountability Office and the Congressional Research Service. In addition, Section 219 of ITRSHRA requires that an investigation of an ISA violation begin if a company reports in its filings to the Securities and Exchange Commission (SEC) that it has knowingly engaged in activities that would violate ISA (or Section 104 of CISADA or transactions with entities designated under E.O 13224 or 13382, see below).

Available Sanctions Under ISA

Once a firm is determined to be a violator, the original version of ISA required the imposition of two of a menu of six sanctions on that firm. The Iran Freedom Support Act added three new possible sanctions and required the imposition of at least three out of the nine against violators. CISADA added three more sanctions to the ISA menu and required imposition of at least 5 out of the 12 sanctions. Executive Orders 13590 and 13622 provide for exactly the same penalties as those in ISA. The 12 available sanctions against the sanctioned entity, from which the Secretary of State or the Treasury can select, are as follows:

1. denial of Export-Import Bank loans, credits, or credit guarantees for U.S. exports to the sanctioned entity (original ISA)

2. denial of licenses for the U.S. export of military or militarily useful technology to the entity (original ISA)

3. denial of U.S. bank loans exceeding $10 million in one year to the entity (original ISA)

4. if the entity is a financial institution, a prohibition on its service as a primary dealer in U.S. government bonds; and/or a prohibition on its serving as a repository for U.S. government funds (each counts as one sanction) (original ISA)

5. prohibition on U.S. government procurement from the entity (original ISA)

6. prohibitions in transactions in foreign exchange by the entity (added by CISADA)

7. prohibition on any credit or payments between the entity and any U.S. financial institution (added by CISADA)

8. prohibition of the sanctioned entity from acquiring, holding, using, or trading any U.S.-based property which the sanctioned entity has a (financial) interest in (added by CISADA)

9. restriction on imports from the sanctioned entity, in accordance with the International Emergency Economic Powers Act (IEEPA; 50 U.S.C. 1701) (original ISA)

10. a ban on a U.S. person from investing in or purchasing significant amounts of equity or debt instruments of a sanctioned person (added by ITRSHRA)

11. exclusion from the United States of corporate officers or controlling shareholders of a sanctioned firm (added by ITRSHRA)

12. imposition of any of the ISA sanctions on principal offices of a sanctioned firm (added by ITRSHRA).

Mandatory Sanction: Prohibition on Contracts with the U.S. Government CISADA (§102[b]) added a requirement in ISA that companies, as a condition of obtaining a U.S. government contract, certify to the relevant U.S. government agency that the firm—and any companies it owns or controls—are not violating ISA. Regulations to implement this requirement were issued on September 29, 2010.

Executive Order 13574 of May 23, 2011, specifies which sanctions are to be imposed : This executive order made a blanket stipulation that, when an entity is sanctioned under Section 5 of ISA, the penalties to be imposed are numbers 3, 6, 7, 8, and 9, above. The order also clarified that it is the responsibility of the Department of the Treasury to implement those ISA sanctions that involve the financial sector, including bans on loans, credits, and foreign exchange for, or imports from, the sanctioned entity, as well as blockage of property of the sanctioned entity (if these sanctions are selected by the Secretary of State, who makes the decision which penalties to impose on sanctioned entities). This order was revoked by E.O. 13716 on Implementation Day, in accordance with the JCPOA.

Oversight

Several mechanisms for Congress to oversee whether the Administration is investigating ISA violations were added by ITRSHRA. Section 223 of that law required a Government Accountability Office report, within 120 days of enactment, and another such report a year later, on companies that have undertaken specified activities with Iran that might constitute violations of ISA. Section 224 amended a reporting requirement in Section 110(b) of CISADA by requiring an Administration report to Congress every 180 days on investment in Iran's energy sector, joint ventures with Iran, and estimates of Iran's imports and exports of petroleum products. The GAO reports have been issued; there is no information available on whether the required Administration reports have been issued as well.

Interpretations and Implementation of ISA and Related Laws

The sections below provide information on how some key ISA provisions have been interpreted.

Application to Energy Pipelines

ISA's definition of "investment" that is subject to sanctions has been consistently interpreted by successive Administrations to include construction of energy pipelines to or through Iran. Such pipelines are deemed to help Iran develop its petroleum (oil and natural gas) sector. This interpretation was reinforced by amendments to ISA in CISADA, which specifically included in the definition of petroleum resources "products used to construct or maintain pipelines used to transport oil or liquefied natural gas." In March 2012, then-Secretary of State Clinton made clear that the Obama Administration interprets the provision to be applicable from the beginning of pipeline construction.21

Implementation. No gas pipeline projects involving Iran have been sanctioned.

Application to Crude Oil Purchases

The original version of ISA did not provide for sanctioning purchases of crude oil from Iran. However, laws and executive orders discussed above took that step.

Exception for Shah Deniz and other Gas Export Projects

The effective dates of U.S. sanctions laws and Orders exclude long-standing joint natural gas projects that involve some Iranian firms—particularly the Shah Deniz natural gas field and pipeline in the Caspian Sea. That project is run by a consortium in which Iran's Naftiran Intertrade Copmany (NICO) holds a passive 10% share, and includes BP, Azerbaijan's natural gas firm SOCAR, Russia's Lukoil, and other firms. NICO was sanctioned under ISA and other provisions (until JCPOA Implementation Day), but an OFAC factsheet of November 28, 2012, stated that the Shah Deniz consortium, as a whole, is not determined to be "a person owned or controlled by" the government of Iran (as defined in Executive Order 13599) and that transactions with the consortium were permissible. The guidance appears to also apply to the second phase of the project, which also involves NICO and will carry gas to Europe.

Application to Purchases from Iran of Natural Gas

The Iran Freedom and Counterproliferation Act (IFCA, discussed below), authorized sanctions on transactions with Iran's energy sector, but specifically excludedfrom sanctions purchases of natural gas from Iran. Purchases of Iranian gas were distinguishable from the construction of natural gas pipelines involving Iran which, as discussed, was subject to sanctions.

Application to Iranian Liquefied Natural Gas Development

The original version of ISA did not apply to the development by Iran of a liquefied natural gas (LNG) export capability. Iran has no LNG export terminals, in part because the technology for such terminals is patented by U.S. firms and unavailable for sale to Iran. CISADA specifically included LNG in the ISA definition of petroleum resources and therefore made subject to sanctions LNG investment in Iran or supply of LNG tankers or pipelines to Iran.

Application to Private Financing but Not Official Credit Guarantee Agencies

The definitions of investment and other activity that can be sanctioned under ISA clearly include financing for investment in Iran's energy sector, or for sales of gasoline and refinery-related equipment and services. Therefore, banks and other financial institutions that assist energy investment and refining and gasoline procurement activities could be sanctioned under ISA.

However, the definitions of financial institutions in Iran sanctions laws are interpreted not to apply to official credit guarantee agencies—such as France's COFACE and Germany's Hermes. These credit guarantee agencies are arms of their parent governments, and ISA does not provide for sanctioning governments or their agencies. Early versions of CISADA sanctioned such entities but such provisions were dropped from the final law, possibly to avoid allied criticism.

ISA Waiver, Exemptions, and Sunset Provisions

The President can waive ISA sanctions in several ways—general, country-specific, or company-specific.

General Waiver. Under Section 4(c)(1)(a), the President can waive (for six months at a time) the requirement to investigate violations every six (6) months. To implement the JCPOA, this waiver was exercised by the Obama Administration (the latest on January 18, 2017), and was last renewed by the Trump Administration on January 12, 2018.

Country-Specific Waiver. Under Section 4(c)(1)(B), the President can waive ISA sanctions (for 12 months at a time) of all companies whose governments are determined to be "closely cooperating with the United States in multilateral efforts to prevent Iran from" acquiring WMD or acquiring advanced conventional weapons. The President must also certify that the waiver is vital to the national security interests of the United States.

Company-Specific Waiver. Under Section 9(c), the President can waive ISA sanctions (for one year at a time) on any company for which the President determines that the waiver is "essential to the national security interests of the United States." This waiver was used in 1998 to avoid penalizing Total, Gazprom, and Petronas for an Iran investment.

Once ISA snaps back into effect, some governments reportedly might seek the country-specific or country-specific waivers to avoid penalties on their companies that invested in Iran while U.S. sanctions were waived.

ISA (§5[f]) also contains several exceptions such that the President is not required to impose sanctions that prevent procurement of defense articles and services under existing contracts, in cases where a firm is the sole source supplier of a particular defense article or service. The President is not required to prevent procurement of essential spare parts or component parts.

"Special Rule" Exempting Firms That End Their Business with Iran

Under a provision added by CISADA (§102[g][5]), ISA provides a means—a so-called "special rule"—for firms to avoid ISA sanctions by pledging to verifiably end their business with Iran and such business with Iran in the future. Under the special rule, which has been invoked on several occasions, as discussed below, the Administration is not required to impose sanctions against a firm that makes such pledges. However, firms are allowed several years, in some cases, to wind down existing business in Iran, in part because the buy-back program used by Iran pays energy firms back their investment over time, making it highly costly for them to suddenly end operations in Iran.

Administration Termination Process and Requirements

The Administration can immediately terminate all ISA provisions if the Administration certifies that Iran:

(1) has ceased its efforts to acquire WMD; (2) has been removed from the U.S. list of state sponsors of terrorism; and (3) no longer "poses a significant threat" to U.S. national security and U.S. allies.22

This termination provision, and the sunset provision discussed below, does not apply to those laws that apply ISA sanctions without specifically amending ISA. The executive orders and laws that apply ISA sanctions to specified violators but without amending ISA itselfcan be revoked by a superseding executive order or congressional action that amends or repeals the provisions involved.

Sunset (Automatic Termination) Provisions

ISA was scheduled to sunset on December 31, 2016, as provided for by CISADA. This followed prior sunset extensions to December 31, 2011 (by P.L. 109-293); December 31, 2006 (P.L. 107-24, August 3, 2001); and August 5, 2001 (original law). P.L. 107-24 also required an Administration report on ISA's effectiveness within 24 to 30 months of enactment; that report was submitted to Congress in January 2004 and did not recommend that ISA be repealed. In December 2016, P.L. 114-277 extended the law, as is, until December 31, 2026.

Status: Waived Pursuant to the JCPOA, but Will Go Back into Effect by November 4, 2018 (180-day Wind-Down Period)

In 2011, Congress sought to reduce Iran's exportation of oil by imposing sanctions on the mechanisms that importers use to pay Iran for oil. The Obama Administration asserted that such legislation could lead to a rise in oil prices and harm U.S. relations with Iran's oil customers, and President Obama, in his signing statement on the bill, indicated he would implement the provision so as not to damage U.S. relations with partner countries.

The law imposed penalties on transactions with Iran's Central Bank. Section 1245 of the FY2012 National Defense Authorization Act (NDAA, P.L. 112-81, signed on December 31, 2011):

Requires the President to prevent a foreign bank from opening an account in the United States—or impose strict limitations on existing U.S. accounts—if that bank processes payments through Iran's Central Bank. The provision applies to a foreign central bank only if the transaction with Iran's Central Bank is for oil purchases. The provision went fully into effect after 180 days (June 28, 2012).

Exemption Provision. The law provided a strong incentive for Iran's oil buyers to cut purchases of Iranian oil by providing for an exemption if they meet certain conditions. The President may grant an exemption for foreign banks—for any transactions with the Central Bank (not just for oil)—if the President certifies that the parent country of the bank has significantly reduced its purchases of oil from Iran. That determination is reviewed every 180 days and countries were required to reduce their oil buys from Iran, relative to the previous 180-day period, to retain the exemption. ITRSHRA amended Section 1245 such that any country that completely ceased purchasing oil from Iran would retain an exemption.

Sanctions on transactions for oil apply only if the President certifies to Congress every 90 days, based on a report by the Energy Information Administration, that the oil market is adequately supplied, and, an Administration determination every 180 days that there is a sufficient supply of oil worldwide to permit countries to reduce purchases from Iran. The required EIA reports and Administration determinations have been issued at the prescribed intervals, even during the period when the law is in a state of waiver. The latest such determination of sufficient oil supply was made on November 15, 2017, and the next determination of oil supply sufficiency is due by May 14—a few days after the next waiver of the law is due. If the President does not renew the waiver of this law, the compliance by foreign countries in cutting their oil purchases would be assessed on/about November 8, 2018, at which time sanctions for any noncompliance could be imposed.

Implementation: Exemptions Issued

The enacted law lacks a precise definition of "significant reduction" in oil purchases. On January 19, 2012, several Senators wrote to then-Treasury Secretary Geithner agreeing with outside experts that "significant reduction" should be defined as an 18% purchase reduction based on total price paid (not just volumes).23 Obama Administration officials said they largely adopted that standard. The EU embargo on purchases of Iranian oil, announced January 23, 2012, and which took full effect by July 1, 2012, implied that virtually all EU oil customers of Iran would obtain exemptions. The table below on major Iranian oil customers indicates cuts made by major customers compared to 2011.

After March 20, 2012, Japan maintained an exemption for significantly reducing purchases and 10 EU countries were exempted for ending purchases pursuant to the EU Iran oil purchase embargo of July 1, 2012. The 10 EU countries are Belgium, Czech Republic, France, Germany, Greece, Italy, the Netherlands, Poland, Spain, and Britain. (Seventeen EU countries were not granted exemptions because they were not buying Iran's oil and could not "significantly reduce" buys from Iran.)

After June 2012, the following countries maintained exemptions for significant reductions: China, India, South Korea, Turkey, and Taiwan.

Also after June 2012, the following countries maintained exemptions for ending oil purchases from Iran: Singapore, Malaysia, South Africa, and Sri Lanka.

Re-Activation of the Provision by November 4, 2018

The January 2016 waivers issued to implement the JCPOA suspended the requirement for a country to cut oil purchases from Iran in order to maintain its exemption from sanctions. Virtually all the countries that received exemptions resumed buying Iranian oil after the waiver was issued. The provision will go back into effect by November 4, 2018, and countries would be required to cut their oil purchases from Iran by that time in order to requalify for an exemption.25 However, the Trump Administration has indicated it might apply an altered standard for evaluating exemptions. On June 26, 2016, a senior State Department official, in a background briefing, stated that Department officials, in meetings with officials of countries that import Iranian oil, were urging these countries to cease buying Iranian oil entirely by November 4, 2018.26

Waiver and Termination Provisions

The law provides for the President to waive the sanctions for 120 days, renewable for successive 120-day periods, if the President determines that doing so is in the national security interest. Outright repeal or amendment of this law would require congressional action.

This provision was waived to implement the JPA (to allow Iran's oil customers to maintain purchases level at 1.1 million barrels per day) and again to implement the JCPOA (to remove any ceiling on Iran's exports of oil).

Waivers to Implement the JCPOA

The provision (Section 1245(d)(5)) was waived on January 18, 2017, just before the Obama Administration left office.The Trump Administration renewed the waiver on May 18, 2017,on September 14, 2017, and on January 12, 2018. This law will go back into effect on November 4, 2018 (180-day wind-down period).

Iran Hard Currency "Lock Up" Provision Added by ITRSHRA

Status: Waived but Will Go Back into Effect on November 4, 2018

The ability of Iran to repatriate its earned hard currency to the Central Bank was impeded by a provision of the ITRSHRA which went into effect on February 6, 2013 (180 days after enactment). Section 504 of the ITRSHRA amended Section 1245 of the FY2012 NDAA (adding "clause ii" to Paragraph D[1]) by requiring that any funds paid to Iran as a result of exempted transactions (oil purchases, for example) be credited to an account located in the country with primary jurisdiction over the foreign bank making the transaction. This provision essentially prevented Iran from repatriating to its Central Bank any hard currency Iran held in foreign banks around the world, and mainly the banks of Iran's main oil customers. The provision largely compelled Iran to buy the products of the oil customer countries.

ITRSHRA Waiver Provision

The waiver provision that applies to the sanctions imposed under the FY2012 NDAA (P.L. 112-81) applies to this hard currency "lock-up" provision. A waiver period of six months is permitted.

To implement the JPA, a waiver was issued under P.L. 112-81 (Section 212 and 213) to allow Iran to receive some hard currency from ongoing oil sales in eight installments during the JPA period. Iran remained unable under the JPA to remove hard currency from existing accounts abroad. As of Implementation Day, the restriction was waived completely, enabling Iran to gain access to hard currency from ongoing purchases of its oil.

Waivers to Implement the JCPOA

Sections 212(d)(10 and 2134(b)(1) of ITRSHRA were waived by the Obama Administration on January 18, 2017.The waiver was last renewed on January 12, 2018.Its provisions go back into effect no later than November 4, 2018.

Table 1. Top Oil Buyers From Iran and Reductions

(amounts in barrels per day, including condensates)

Country/Bloc

2011 Average

JPA period average (2014-2016)

Estimated Levels Just Prior to May 8, 2018, U.S. Exit from JCPOA

Post-May 8, 2018, Estimated Levels

European Union (particularly Italy, Spain, and Greece)

600,000

Negligible

520,000 +

Several refiners announced reductions. Imports likely well below 500,000 bpd

China

550,000

410,000

700,000

no reduction

Japan

325,000

190,000

133,000

below 100,000

India

320,000

190,000

620,000

small reductions

South Korea

230,000

130,000

100,000

Below 100,000

Turkey

200,000

120,000

200,000

no announced reduction

South Africa

80,000

negligible

negligible

negligible

Malaysia

55,000

negligible

negligible

negligible

Sri Lanka

35,000

negligible

negligible

negligible

Taiwan

35,000

10,000

67,000

reductions under consideration

Singapore

20,000

negligible

negligible

negligible

Syria

negligible

negligible

33,000

reductions unlikely

Other/UAE Refiners

55,000

negligible

100,000

not known

Total

2.5 mbd

1.057 mbd

2.47 mbd estimate

Likely below 2 mbd

Source and Note: Bloomberg News and other press articles on Iran oil customer purchase volumes. Figures do not necessarily include purchases of condensates, which are light petroleum liquids that are associated with oil and natural gas production. Figures for the post-May 8 period are rough estimates based on announcements by refiners that purchase Iranian oil, and because of delivery schedules, exact import volumes on any given point in time are difficult to discern precisely.

Status: No sanctions in this section eased to implement JCPOA

Several laws and executive orders seek to bar Iran from obtaining U.S. or other technology that can be used for weapons of mass destruction (WMD) programs. Sanctions on Iran's exportation of arms are discussed in the sections above on sanctions for Iran's support for terrorist groups.

Iran-Iraq Arms Nonproliferation Act and Iraq Sanctions Act

The Iran-Iraq Arms Nonproliferation Act (Title XIV of the FY1993 National Defense Authorization Act, P.L. 102-484, signed in October 1992) imposes a number of sanctions on foreign entities that supply Iran with WMD technology or "destabilizing numbers and types of advanced conventional weapons."27Advanced conventional weapons are defined as:

(1) such long-range precision-guided munitions, fuel air explosives, cruise missiles, low observability aircraft, other radar evading aircraft, advanced military aircraft, military satellites, electromagnetic weapons, and laser weapons as the President determines destabilize the military balance or enhance the offensive capabilities in destabilizing ways;

(2) such advanced command, control, and communications systems, electronic warfare systems, or intelligence collections systems as the President determines destabilize the military balance or enhance offensive capabilities in destabilizing ways; and

(3) such other items or systems as the President may, by regulation, determine necessary for the purposes of this title.

The definition is generally understood to include technology used to develop ballistic missiles.

Sanctions to be Imposed: Sanctions imposed on violating entities include

a ban, for two years, on U.S. government procurement from the entity;

a ban, for two years, on licensing U.S. exports to that entity;

authority (but not a requirement) to ban U.S. imports from the entity.

If the violator is determined to be a foreign country, sanctions to be imposed are

a one-year ban on U.S. assistance to that country;

a one-year requirement that the United States vote against international lending to it;

a one-year suspension of U.S. coproduction agreements with the country;

a one-year suspension of technical exchanges with the country in military or dual use technology;

a one-year ban on sales of U.S. arms to the country;

an authorization to deny the country most-favored-nation trade status; and to ban U.S. trade with the country.

Section 1603 of the act amended an earlier law, the Iraq Sanctions Act of 1990 (Section 586G(a) of P.L. 101-513), to provide for a "presumption of denial" for all dual use exports to Iran (including computer software).

Implementation

A number of entities were sanctioned under the act in the 1990s. None of the designations remain active, because the sanctions have limited duration. The entities sanctioned are in the end tables.

Waiver

Section 1606 of the act provides a presidential waiver for the provisions of the act, and for those imposed pursuant to the Iraq Sanctions Act of 1990, if the President determines a waiver is "essential to the national interest."

Anti-Terrorism and Effective Death Penalty Act of 1996

Another law reinforces the authority of the President to sanction governments that sell arms to Iran. Under Sections 620G and 620H of the Foreign Assistance Act, as added by the Anti-Terrorism and Effective Death Penalty Act of 1996 (Sections 325 and 326 of P.L. 104-132), the President is required to withhold foreign aid from any country that provides to a terrorism list country financial assistance or arms. Waiver authority is provided. Section 321 of that act also makes it a criminal offense for U.S. persons to conduct financial transactions with terrorism list governments.

Implementation

No foreign assistance cuts or other penalties under this law have been announced.

Proliferation-Related Provision of the Iran Sanctions Act

As noted above, Section 5(b)(1) of ISA subjects to ISA sanctions firms or persons determined to have sold to Iran (1) technology useful for weapons of mass destruction (WMD) or (2) "destabilizing numbers and types" of advanced conventional weapons. This, and Section 5(b)(2) pertaining to joint ventures to mine uranium, are theonly provisions of ISA that were not waived to implement the JCPOA.

Implementation

As noted earlier, no sanctions under this section of ISA have been imposed.

Iran-North Korea-Syria Nonproliferation Act

The Iran Nonproliferation Act (P.L. 106-178, signed in March 2000) is now called the Iran-North Korea-Syria Nonproliferation Act (INKSNA) after amendments applying its provisions to North Korea and to Syria. It authorizes sanctions—for two years unless renewed—on foreign persons (individuals or corporations, not governments) that are determined in a report by the Administration to have assisted Iran's WMD programs. Sanctions imposed include (1) a prohibition on U.S. exportation of arms and dual use items to the sanctioned entity; and (2) a ban on U.S. government procurement and of imports to the United States from the sanctioned entity under Executive Order 12938 (of November 14, 1994). INKSNA also banned U.S. extraordinary payments to the Russian Aviation and Space Agency in connection with the international space station unless the President certified that the agency had not transferred any WMD or missile technology to Iran within the year prior.28

Implementation

Entities that have been sanctioned under this law are listed in the tables at the end of the report. Most of the sanctions have expired because most of the designations of violators were made more than two years ago. The JCPOA required the United States to suspend INKSNA sanctions against "the acquisition of nuclear-related commodities and services for nuclear activities contemplated in the JCPOA," but no entities were "delisted" to implement the JCPOA.

Waiver and Termination

Section 4 gives the President the authority to not impose sanctions if the President justifies that decision to Congress. Section 5 provides for exemptions from sanctions if certain conditions are met, particularly that the government with jurisdiction over the entity cooperating to stop future such transfers to Iran.

Termination of this law would require congressional action.

Executive Order 13382 on Proliferation-Supporting Entities

Status: Order Remained in Force, but Numerous Entities "Delisted"

Executive Order 13382 (June 28, 2005) allows the President to block the assets of proliferators of weapons of mass destruction (WMD) and their supporters under the authority granted by the International Emergency Economic Powers Act (IEEPA; 50 U.S.C. 1701 et seq.), the National Emergencies Act (50 U.S.C. 1601 et seq.), and Section 301 of Title 3, United States Code.

Implementation. The numerous entities sanctioned under the order for dealings with Iran are listed in the tables at the end of this report. Entities delisted and which were to be delisted in accordance with the JCPOA (in October 2023) are in italics and boldface type, respectively. All entities delisted to implement the JCPOA are to be relisted on November 5, 2018, according to the Treasury Department.

The CAATSA law, signed on August 2, 2017, mandates sanctions on arms sales to Iran and on entities that "materially contribute" to Iran's ballistic missile program.

Section 104 references implementation of E.O. 13382, which sanctions entities determined by the Administration to be assisting Iran's ballistic missile program. The section mandates that the Administration impose the same sanctions as in E.O. 13382 on any activity that materially contributes to Iran's ballistic missile program or any system capable of delivering WMD. The section also requires an Administration report every 180 days on persons (beginning on January 29, 2018) contributing to Iran's ballistic missile program in the preceding 180 days.

Section 107 mandates imposition of sanctions (the same sanctions as those contained in E.O. 13382) on any person that the President determines has sold or transferred to or from Iran, or for the use in or benefit of Iran: the weapons systems specified as banned for transfer to or from Iran in U.N. Security Council Resolution 2231. These include most major combat systems such as tanks, armored vehicles, warships, missiles, combat aircraft, and attack helicopters. The provision goes somewhat beyond prior law that mandates sanctions mainly on sales to Iran of "destabilizing numbers and types of advanced conventional weapons." The imposition of sanctions is not required if the President certifies that a weapons transfer is in the national security of the United States; that Iran no longer poses a significant threat to the United States or U.S. allies; and that the Iranian government no longer satisfies the requirements for designation as a state sponsor of terrorism.

Sanctions on the Islamic Revolutionary Guard Corps (IRGC)

Numerous sanctions discussed in this report target Iran's Islamic Revolutionary Guard Corps (IRGC), which plays a role in repressing domestic dissent, developing Iran's energy sector, developing Iran's WMD programs particularly by procuring technology abroad, and supporting pro-Iranian militant movements and governments in the Middle East region. Much of the work on Iran's oil and gas fields is done through a series of contractors. Some of them, such as Khatam ol-Anbia and Oriental Kish, have been identified by the U.S. government as controlled by the IRGC and have been sanctioned under various executive orders. The 2011 appointment of Khatam ol-Anbia's chief, Rostam Ghasemi, as oil minister, caused the U.S. government and many experts to assess that the IRGC role in Iran's energy sector was large and growing. He was replaced by President Hassan Rouhani with a former Oil Minister and oil industry professional, but the IRGC involvement in Iran's energy sector is not shrinking. The Wall Street Journal reported on May 27, 2014, that Khatam ol-Anbia has $50 billion in contracts with the Iranian government, including in the energy sector but also in port and highway construction. It has as many as 40,000 employees. Sanctions targeting the IRGC are discussed below—and no IRGC-related sanctions have been waived or terminated to implement the JCPOA:

The IRGC is named as a proliferation-supporting entity under Executive Order 13382, and the Qods Force, the unit of the IRGC that assists pro-Iranian movements and countries abroad, is named as a terrorism-supporting entity under Executive Order 13324. Several Iranian firms linked to the IRGC are sanctioned, as noted in the tables at the end of this report. Several IRGC commanders are named under other executive orders, discussed below, sanctioning Iranian human rights abusers, abusers of Syrian human rights, and entities undermining stability in Iraq.

Section 311 of the ITRSHRA requires a certification by a contractor to the U.S. government that it is not knowingly engaging in a significant transaction with Iran's Islamic Revolutionary Guard Corps (IRGC), or any of its agents or affiliates that have been sanctioned under several executive orders discussed below. A contract may be terminated if it is determined that the company's certification of compliance was false.

Section 302 of the Iran Threat Reduction Act imposes at least 5 out of 12 ISA sanctions on persons that materially assist, with financing or technology, the IRGC, or assist or engage in "significant" transactions with any of its affiliates that are sanctioned under Executive Order 13382, 13224, or similar executive orders discussed below—or which are determined to be affiliates of the IRGC. Section 302 did not amend ISA.

Section 301 of the Iran Threat Reduction Act requires the President, within 90 days of enactment (by November 9, 2012), to identify "officials, agents, or affiliates" of the IRGC and to impose sanctions in accordance with Executive Order 13382 or 13224, including blocking any such designee's U.S.-based assets or property. Some of these designations, including of National Iranian Oil Company (NIOC), were made by the Treasury Department on November 8, 2012.

Section 303 of the ITRSHRA requires the imposition of sanctions on agencies of foreign governments that provide technical or financial support, or goods and services to sanctioned (under U.S. executive orders or U.N. resolutions) members or affiliates of the IRGC. Sanctions include a ban on U.S. assistance or credits for that foreign government agency, a ban on defense sales to it, a ban on U.S. arms sales to it, and a ban on exports to it of controlled U.S. technology.

Section 104 of CISADA sanctions foreign banks that conduct significant transactions with the IRGC or any of its agents or affiliates that are sanctioned under any executive order. It also sanctions any entity that assists Iran's Central Bank efforts to help the IRGC acquire WMD or support international terrorism.

The Countering America's Adversaries Through Sanctions Act (P.L. 115-44) mandates sanctions contained in E.O. 13224 (terrorism entities) on the IRGC and its officials, agents and affiliates be applied by October 30, 2017. On October 13, 2017, the Treasury Department designated the IRGC under E.O. 13224.

No IRGC-related laws or executive orders were waived or suspended to implement the JCPOA and no IRGC affiliates were "delisted." There are no commitments in the JCPOA for the United States to suspend any IRGC-related sanctions.

Foreign Aid Restrictions for Named Suppliers of Iran

Some past foreign aid appropriations have withheld U.S. assistance to the Russian Federation unless it terminates technical assistance to Iran's nuclear and ballistic missiles programs. The provision applied to the fiscal year for which foreign aid is appropriated. Because U.S. aid to Russia generally has not gone to the Russian government, little or no funding was withheld as a result of the provision. The JCPOA makes no reference to any U.S. commitments to waive this sanction or to request that Congress not enact such a provision.

Sanctions on "Countries of Diversion Concern"

Title III of CISADA established authorities to sanction countries that allow U.S. technology that Iran could use in its nuclear and WMD programs to be reexported or diverted to Iran. Section 303 of CISADA authorizes the President to designate a country as a "Destination of Diversion Concern" if that country allows substantial diversion of goods, services, or technologies characterized in Section 302 of that law to Iranian end-users or Iranian intermediaries. The technologies specified include any goods that could contribute to Iran's nuclear or WMD programs, as well as goods listed on various U.S. controlled-technology lists such as the Commerce Control List or Munitions List. For any country designated as a country of diversion concern, there would be prohibition of denial for licenses of U.S. exports to that country of the goods that were being reexported or diverted to Iran.

Implementation: To date, no country has been designated a "Country of Diversion Concern." Some countries adopted or enforced antiproliferation laws apparently to avoid designation.

Waiver and Termination

Waiver: The President may waive sanctions on countries designated as of Diversion Concern for 12 months, and additional 12-month periods, pursuant to certification that the country is taking steps to prevent diversions and reexports.

Termination: The designation terminates on the date the President certifies to Congress that the country has adequately strengthened its export controls to prevent such diversion and reexports to Iran in the future. The JCPOA makes no reference to waiving or terminating this sanction.

Financial/Banking Sanctions

U.S. efforts to shut Iran out of the international banking system were a key component of the 2010-2016 international sanctions regime.

Targeted Financial Measures

Status: Initiative Terminated After JCPOA Implementation

During 2006-2016, the Department of the Treasury used longstanding authorities to persuade foreign banks to cease dealing with Iran, in part by briefing them on Iran's use of the international financial system to fund terrorist groups and acquire weapons-related technology. According to a GAO report of February 2013, the Department of the Treasury made overtures to 145 banks in 60 countries, including several visits to banks and officials in the UAE, and convinced at least 80 foreign banks to cease handling financial transactions with Iranian banks. Upon implementation of the JCPOA, the Treasury Department largely dropped this initiative, and instead largely sought to encourage foreign banks to conduct normal transactions with Iran.

Ban on Iranian Access to the U.S. Financial System

Status: Remains in Force

U.S. regulations ban Iran from direct access to the U.S. financial system. The ITRs (C.F.R. Section 560.516) allow U.S. banks to send funds (including U.S. dollars) to Iran for allowed (licensed) transactions. However, the U.S. dollars cannot be directly transferred to an Iranian bank, but must instead be channeled through an intermediary financial institution, such as a European bank. Section 560.510 specifically allows for U.S. payments to Iran to settle or pay judgments to Iran, such as those reached in connection with the U.S.-Iran Claims Tribunal, discussed above. However, the prohibition on dealing directly with Iranian banks still applies.

Ban on U-Turn Transactions

On November 6, 2008, the Department of the Treasury tightened regulations further by barring U.S. banks from handling any indirect transactions (U-turn transactions, meaning transactions with non-Iranian foreign banks that are handling transactions on behalf of an Iranian bank) with all Iranian banks.29 This ban remained in effect under the JCPOA implementation, and Iran argued that these U.S. restrictions deter European and other banks from reentering the Iran market, as discussed later in this report.

Implementation

The Department of the Treasury and other U.S. authorities has announced financial settlements (forfeiture of assets and imposition of fines) with various banks that have helped Iran (and other countries such as Sudan, Syria, and Cuba) access the U.S. financial system. The settlement dollar amounts were reportedly determined, at least in part, by the dollar value, number, and duration of illicit transactions conducted, and the strength of the evidence collected by the accusing U.S. regulators,30 but is not known from published sources how final settlement amounts compare to the amounts sought by U.S. regulators. (As noted above, the FY2016 Consolidated Appropriation (P.L. 114-113) provides for use of the proceeds of the settlements above to pay compensation to victims of Iranian terrorism.)

(1) In 2004, UBS paid a $100 million settlement for the unauthorized movement of U.S. dollars to Iran and other sanctioned countries; (2) in December 2005, Dutch bank ABN Amro paid an $80 million settlement for failing to fully report the processing of financial transactions involving Iran's Bank Melli; (3) in December 2009, Credit Suisse paid a $536 million settlement for illicitly processing Iranian transactions with U.S. banks;31 (4) in June 2012, Dutch bank ING paid a $619 million settlement for concealing the movement of billions of dollars through the U.S. financial system on behalf of Iranian and Cuban clients;32 (5) in August 2012, Standard Chartered paid a $340 million settlement to New York State regulators for allegations that it had processed transactions on behalf of Iran;33 (6) in January 2014, Luxembourg-based Clearstream Banking paid $152 million for helping Iran evade U.S. banking restrictions; (7) in January 2014, the Bank of Moscow paid a $9.5 million settlement for illicitly allowing Bank Melli to access the U.S. financial system;34 and (8) in June 2014, BNP Paribas pled guilty to helping Iran (and Sudan and Cuba) violate U.S. sanctions and forfeited $8.9 billion and paid $140 million in fines.35

Status: Remained in force after JCPOA, but Iranian banks "delisted." De-listed banks will be "re-listed" as of November 5, 2018.

Section 104 of CISADA requires the Secretary of the Treasury to forbid U.S. banks from opening new "correspondent accounts" or "payable-through accounts" (or force the cancellation of existing such accounts) for:36

any foreign bank that transactions business with an entity that is sanctioned by Executive Order 13224 or 13382 (terrorism and proliferation activities, respectively). These orders are discussed above. A full list of such entities is at the end of this report, and entities "delisted" are in italics.

any foreign bank determined to have facilitated Iran's efforts to acquire WMD or delivery systems or provide support to groups named as Foreign Terrorist Organizations (FTOs) by the United States.

any foreign bank that facilitates "the activities of" an entity designated under by U.N. Security Council resolutions that sanction Iran.

any foreign bank that transacts business with the IRGC or any of its affiliates designated under any U.S. Iran-related executive order.

any foreign bank that does business with Iran's energy, shipping, and shipbuilding sectors, including with NIOC, NITC, and IRISL. (This provision was contained in Section 1244(d) of the Iran Freedom and Counterproliferation Act, IFCA, discussed below, but did not specifically amend CISADA. The provision was waived to implement the JCPOA.

One additional intent of the provision was to reduce the ability of Iran's pivotal import-export community (referred to in Iran as the "bazaar merchants" or "bazaaris") from obtaining "letters of credit" (trade financing) to buy or sell goods. The Department of the Treasury has authority to determine what constitutes a "significant" financial transaction.

Waiver and Termination

Under Section 401(a) of CISADA, the Section 104 sanctions provisions would terminate 30 days after the President certifies to Congress that Iran (1) has met the requirements for removal from the terrorism list, AND (2) has ceased pursuit, acquisition, or development of, and verifiably dismantled its nuclear weapons and other WMD programs.

The Secretary of the Treasury may waive sanctions under Section 104, with the waiver taking effect 30 days after the Secretary determines that a waiver is necessary to the national interest and submits a report to Congress describing the reason for that determination.

As noted, Section 104 was not waived to implement the JCPOA, but many entities with which transactions would have triggered sanctions under Section 104 have been "delisted" in accordance with the JCPOA. These entities are to be relisted as Specially Designated Nationals (SDNs) and therefore subject to secondary sanctioning by November 5, 2018.

Implementation of Section 104: Sanctions Imposed

On July 31, 2012, the sanctioned the Bank of Kunlun in China and the Elaf Islamic Bank in Iraq under Section 104 of CISADA. On May 17, 2013, the Department of the Treasury lifted sanctions on Elaf Islamic Bank in Iraq, asserting that the bank had reduced its exposure to the Iranian financial sector and stopped providing services to the Export Development Bank of Iran.

Iran Designated a Money-Laundering Jurisdiction/FATF

Status: Central Bank Remained Designated Under this Section During JCPOA.

On November 21, 2011, the Obama Administration identified Iran as a "jurisdiction of primary money laundering concern"37 under Section 311 of the USA Patriot Act (31 U.S.C. 5318A), based on a determination that Iran's financial system, including the Central Bank, constitutes a threat to governments or financial institutions that do business with Iran's banks. The designation imposed additional requirements on U.S. banks to ensure against improper Iranian access to the U.S. financial system.

The Administration justified the designation as implementation of recommendations of the Financial Action Task Force (FATF)—a multilateral standard-setting body for anti-money laundering and combating the financing of terrorism (AML/CFT). The FATF characterizes Iran as a high-risk and noncooperative jurisdiction with respect to AMF/CFT issues.38 On June 24, 2016, the FATF welcomed an "Action Plan" filed by Iran to address its strategic AML/CFT deficiencies and decided to suspend, for one year, "counter-measures"—mostly voluntary recommendations of increased due diligence with respect to Iran transactions—pending an assessment of Iran's implementation of its Action Plan. The FATF continued the suspension of counter-measures in June and November 2017.39 Iran's performance on its Action Plan was reviewed again by the FATF in late February 2018, and it remained blacklisted because of its refusal to implement anti-terrorism financing measures, such as accession to the Convention for the Suppression of Financing of Terrorism. Iranian bodies, including its Supreme National Security Committee and its Majles (parliament) sought in May 2018 to condition that accession on its not applying to Iran's support for groups Iran supports, such as Hezbollah and Hamas, which Iran does not consider to be terrorist groups.40 Supreme Leader Khamene'i has indicated that Iran should not compromise its policies by acceding to the convention. The FATF is due to review Iran's performance on its Action Plan by the end of June 2018.

Status: waived to implement JCPOA, will go back into effect as specified

The National Defense Authorization Act for FY2013 (H.R. 4310, P.L. 112-239, signed January 2, 2013)—Subtitle D, The Iran Freedom and Counter-Proliferation Act (IFCA) sanctions a wide swath of Iran's economy. (Its provisions on Iran's human rights record are discussed elsewhere.)

Section 1244 of IFCA mandates the blocking of U.S.-based property of any entity (Iranian or non-Iranian) that provides goods, services, or other support to any Iranian entity designated by the Treasury Department as a "specially designated national" (SDN). The tables at the end of this report show that hundreds of Iranian entities are designated as SDNs under various Executive Orders. The Iranian entities designated for civilian economic activity were "delisted" to implement the JCPOA, but will be relisted on November 5, 2018.

Section 1247 of IFCA prohibits from operating in the United States any bank that knowingly facilitates a financial transaction on behalf of an Iranian SDN. This provision is, to some extent, duplicative of Section 104 of CISADA (see above).

Several sections of IFCA impose ISA sanctionson entities determined to have engaged in specified transactions below. (The provisionsapply ISA sanctions but do not amend ISA.)

Energy, Shipbuilding, and Shipping Sector. Section 1244 mandates five out of 12 ISA sanctions on entities that provide goods or services to Iran's energy, shipbuilding, and shipping sectors, or to port operations there—or which provide insurance for such transactions. The sanctions do not apply when such transactions involved purchases of Iranian oil by countries that have exemptions underP.L. 112-81, or to the purchase of natural gas from Iran.This section goes back into effect after a 180-day wind-down period (by November 4, 2018).

Dealings in Precious Metals. Section 1245 imposes five out of 12 ISA sanctions on entities that provide precious metals to Iran (including gold) or semi-finished metals or software for integrating industrial processes. The section affected foreign firms that transferred these items or other precious metals to Iran in exchange for oil or any other product. There is no exception to this sanction for countries exempted under P.L. 112-81. This section went back into effect after a 90-day wind-down period (August 6, 2018).

Insurance for Related Activities. Section 1246 imposes five out of 12 ISA sanctions on entities that provide underwriting services, insurance, or reinsurance for any transactions sanctioned under any Executive Order on Iran, ISA, CISADA, the Iran Threat Reduction Act, INKSNA, other IFCA provisions, or any other Iran sanction, as well as to any Iranian SDN. (There is no exception for countries exempted underP.L. 112-81.) This provision goes back into effect after a 180-day wind-down period (by November 4, 2018).

Exception for Afghanistan Reconstruction. Section 1244(f) of IFCA provides a sanctions exemption for transactions that provide reconstruction assistance for or further the economic development of Afghanistan.

Implementation

On August 29, 2014, the State Department sanctioned UAE-based Goldentex FZE in accordance with IFCA for providing support to Iran's shipping sector. It was "delisted" from sanctions on Implementation Day of the JCPOA.

Waiver and Termination

Sections 1244 and 1245 of IFCA provide for a waiver of sanctions for 180 days, renewable for 180-day periods, if such a waiver is determined to be vital to U.S. national security. These sections were waived in order to implement the JPA. In addition, Section 5(a)(7) of ISA was waived to allow for certain transactions with NIOC and NITC. Sections 1244(i), 1245(g), 1246(e), and 1247(f) of IFCA were waived to implement the JCPOA on January 18, 2017, and that waiver was last renewed on January 12, 2018. IFCA goes back into full effect as specified above.

Sanctions on Iran's Cyber and Transnational Criminal Activities

Status: All in Force during JCPOA Period

The Trump Administration appears to be making increasing use of executive orders issued during the Obama Administration to sanction Iranian entities determined to be engaged in malicious cyberactivities or in transnational crime. Iranian entities have attacked, or attempted to attack, using cyberactivity, infrastructure in the United States, Saudi Arabia, and elsewhere. Iran's ability to conduct cyberattacks appears to be growing. Separately, the Justice Department has prosecuted Iranian entities for such activity. The section below discusses Executive Order 13694 on malicious cyberactivities and Executive Order 13581 on transnational crime.

Executive Order 13581 (July 25, 2011)

Executive Order 13581 blocks the U.S.-based property of entities determined (1) to be a foreign person that constitutes a significant transnational criminal organization; (2) to have materially assisted any person sanctioned under this order; or (3) to be owned or controlled by or to have acted on behalf of a person sanctioned under the order.

Implementation

Iran-related entities sanctioned under the Orders are listed in the tables at the end of this report.

Divestment/State-Level Sanctions

Some U.S. laws require or call for divestment of shares of firms that conduct certain transactions with Iran. A divestment-promotion provision was contained in CISADA, providing a "safe harbor" for investment managers who sell shares of firms that invest in Iran's energy sector at levels that would trigger U.S. sanctions under the Iran Sanctions Act. As noted above, Section 219 of the ITRSHRA of 2012 requires companies to reports to the Securities and Exchange Commission whether they or any corporate affiliate has engaged in any transactions with Iran that could trigger sanctions under ISA, CISADA, and E.O 13382 and 13224.

Implementation: Numerous states have adopted laws, regulations, and policies to divest from—or avoid state government business with—foreign companies that conduct certain transactions with Iran. The JCPOA requires the United States to work with state and local governments to ensure that state-level sanctions do not conflict with the sanctions relief provided by the federal government under the JCPOA. Most states that have adopted Iran sanctions continue to enforce those measures.

Sanctions and Sanctions Exemptions to Support Democratic Change/Civil Society in Iran

Post-JCPOA Status: Virtually All Sanctions in This Section Remain in Effect. No Entities "Delisted."41

A trend in U.S. policy and legislation since the June 12, 2009, election-related uprising in Iran has been to support the ability of the domestic opposition in Iran to communicate and to sanction Iranian officials that commit human rights abuses. Sanctions on the IRGC represent one facet of that trend because the IRGC is key suppressive instrument. Individuals and entities designated under the executive orders and provisions discussed below are listed in the tables at the end of this report. For those provisions that ban visas to enter the United States, the State Department interprets the provisions to apply to all members of the designated entity.42

Expanding Internet and Communications Freedoms

Some laws and Administration action focus on expanding Internet freedom in Iran or preventing the Iranian government from using the Internet to identify opponents. Subtitle D of the FY2010 Defense Authorization Act (P.L. 111-84), called the "VOICE" (Victims of Iranian Censorship) Act, contained several provisions to increase U.S. broadcasting to Iran and to identify (in a report to be submitted 180 days after enactment) companies that are selling Iran technology equipment that it can use to suppress or monitor the Internet usage of Iranians. The act authorized funds to document Iranian human rights abuses since the June 2009 Iranian presidential election. Section 1241 required an Administration report by January 31, 2010, on U.S. enforcement of sanctions against Iran and the effect of those sanctions on Iran.

Section 106 of CISADA prohibits U.S. government contracts with foreign companies that sell technology that Iran could use to monitor or control Iranian usage of the Internet. The provisions were directed, in part, against Nokia (Finland) and Siemens (Germany) for reportedly selling Internet monitoring and censorship technology to Iran in 2008.43 The provision was derived from the Reduce Iranian Cyber-Suppression Act (111th Congress, S. 1475 and H.R. 3284).

On April 23, 2012, President Obama issued an executive order (13606) sanctioning persons who commit "Grave Human Rights Abuses by the Governments of Iran and Syria via Information Technology (GHRAVITY)." The order blocks the U.S.-based property and essentially bars U.S. entry and bans any U.S. trade with persons and entities listed in an Annex and persons or entities subsequently determined to be (1) operating any technology that allows the Iranian (or Syrian) government to disrupt, monitor, or track computer usage by citizens of those countries or assisting the two governments in such disruptions or monitoring; or (2) selling to Iran (or Syria) any technology that enables those governments to carry out such actions.

Section 403 of the ITRSHRA sanctions (visa ban, U.S.-based property blocked) persons/firms determined to have engaged in censorship in Iran, limited access to media, or—for example, a foreign satellite service provider—supported Iranian government jamming or frequency manipulation. On October 9, 2012, the President issued Executive Order 13628 implementing Section 403 by blocking the property of persons/firms determined to have committed the censorship, limited free expression, or assisted in jamming communications. The order also specifies the sanctions authorities of the Department of State and of the Treasury.

Laws and Actions to Promote Internet Communications by Iranians

On March 8, 2010, OFAC amended the Iran Transactions Regulations to allow for a general license for providing free mass market software to Iranians. The ruling incorporated major features of the Iran Digital Empowerment Act (H.R. 4301 in the 111th Congress). The OFAC determination required a waiver of the provision of the Iran-Iraq Arms Nonproliferation Act (Section 1606 waiver provision) discussed above.

Section 103(b)(2) of CISADA exempts from the U.S. export ban on Iran equipment to help Iranians communicate and use the Internet.

On March 20, 2012, the Department of the Treasury amended U.S.-Iran trade regulations to permit several additional types of software and information technology products to be exported to Iran under general license, provided the products were available at no cost to the user.44The items included personal communications, personal data storage, browsers, plug-ins, document readers, and free mobile applications related to personal communications.

On May 30, 2013, the Department of the Treasury amended the trade regulations further to allow for the sale, on a cash basis (no financing), to Iran of equipment that Iranians can use to communicate (e.g., cellphones, laptops, satellite Internet, website hosting, and related products and services).

Measures to Sanction Human Rights Abuses and Promote the Opposition

Some legislation has sought to sanction regime officials involved in suppressing the domestic opposition in Iran or in human rights abuses more generally. Much of this legislation centers around amendments to Section 105 of CISADA.

Sanctions against Iranian Human Rights Abusers. Section 105 of CISADA bans travel and freezes the U.S.-based assets of those Iranians determined to be human rights abusers. On September 29, 2010, pursuant to Section 105, President Obama issued Executive Order 13553 providing for CISADA sanctions against Iranians determined to be responsible for or complicit in post-2009 Iran election human rights abuses. Those sanctioned under the provisions are listed in the tables at the end of this report.

Section 105 terminates if the President certifies to Congress that Iran has (1) unconditionally released all political prisoners detained in the aftermath of the June 2009 uprising; (2) ceased its practices of violence, unlawful detention, torture, and abuse of citizens who were engaged in peaceful protest; (3) fully investigated abuses of political activists that occurred after the uprising; and (4) committed to and is making progress toward establishing an independent judiciary and respecting human rights.

Sanctions on Sales of Anti-Riot Equipment. Section 402 of the ITRSHRA amended Section 105 by adding provisions that sanction (visa ban, U.S. property blocked) any person or company that sells the Iranian government goods or technologies that it can use to commit human rights abuses against its people. Such goods include firearms, rubber bullets, police batons, chemical or pepper sprays, stun grenades, tear gas, water cannons, and like goods. In addition, ISA sanctions are to be imposed on any person determined to be selling such equipment to the IRGC.

Sanctions against Iranian Government Broadcasters/IRIB. Section 1248 of IFCA (Subtitle D of P.L. 112-239) mandates inclusion of the Islamic Republic of Iran Broadcasting (IRIB), the state broadcasting umbrella group, as a human rights abuser. IRIB was designated as an SDN on February 6, 2013, under E.O. 13628 for limiting free expression in Iran. On February 14, 2014, the State Department waived IFCA sanctions under Sections 1244, 1246 or 1247, on any entity that provides satellite connectivity services to IRIB. The waiver has been renewed each year since.

Sanctions against Iranian Profiteers. Section 1249 of IFCA amends Section 105 by imposing sanctions on any person determined to have engaged in corruption or to have diverted or misappropriated humanitarian goods or funds for such goods for the Iranian people. The measure is intended to sanction Iranian profiteers who are, for example, using official connections to corner the market for vital medicines. This provision, which remains in forces, essentially codifies a similar provision of Executive Order 13645.

The Countering America's Adversaries through Sanctions Act (CAATSA, P.L. 115-44) Provision. Section 106 authorizes (but does not require) the imposition of the same sanctions as those prescribed in E.O. 13553 on persons responsible for extrajudicial killings, torture, or other gross violations of internationally recognized human rights against Iranians who seek to expose illegal activity by officials or to defend or promote human rights and freedoms in Iran. The persons to be sanctioned are those named in a report provided 90 days after CAATSA enactment (by October 31, 2017) and annually thereafter. The provision is similar to E.O. 13553 but, in contrast, applies broadly to Iranian human rights abuses and is not limited to abuses connected to suppressing the June 2009 uprising in Iran. Additional designations of Iranian human rights abusers under E.O. 13533 were made subsequent to the enactment of CAATSA and the October 31, 2017, CAATSA report deadline.

Separate Visa Bans. On July 8, 2011, the State Department imposed visa restrictions on 50 Iranian officials for participating in political repression in Iran, but it did not name those banned on the grounds that visa records are confidential. The action was taken under the authorities of Section 212(a)(3)(C) of the Immigration and Nationality Act, which renders inadmissible to the United States a foreign person whose activities could have serious consequences for the United States. On May 30, 2013, the State Department announced it had imposed visa restrictions on an additional 60 Iranian officials on similar grounds.45

High Level Iranian Visits. There are certain exemptions in the case of high level Iranian visits to attend U.N. meetings in New York. The U.N. Participation Act (P.L. 79-264) provides for U.S. participation in the United Nations and as host nation of U.N. headquarters in New York, and visas are routinely issued to heads of state and their aides attending these meetings. In September 2012, the State Department refused visas for 20 members of Iranian President Ahmadinejad's traveling party on the grounds of past involvement in terrorism or human rights abuses. Still, in line with U.S. obligations under the act, then-President Ahmadinejad was allowed to fly to the United States on Iran Air, even though Iran Air was at the time a U.S.-sanctioned entity, and his plane reportedly was allowed to park at Andrews Air Force base.

U.N. Sanctions

U.N. sanctions on Iran, enacted by the Security Council under Article 41 of Chapter VII of the U.N. Charter,46 applied to all U.N. member states. During 2006-2008, three U.N. Security Council resolutions—1737, 1747, and 1803—imposed sanctions on Iran's nuclear program and weapons of mass destruction (WMD) infrastructure. Resolution 1929, adopted on June 9, 2010, was key for its assertion that major sectors of the Iranian economy support Iran's nuclear program - giving U.N. member states authorization to sanction civilian sectors of Iran's economy. It also imposed strict limitations on Iran's development of ballistic missiles and imports and exports of arms.

Assets frozen of Iranian persons and entities named in annexes to the resolutions, and countries required to ban the travel of named Iranians. (Initial list in Resolution 1737, and additional designations in subsequent resolutions).

Transfer to Iran of nuclear, missile, and dual use items to Iran prohibited, except for use in light-water reactors (1737 and 1747). Resolution 2231 delegates to a Joint Commission the authority to approve Iran's applications to purchase dual-use items.

Resolution 1747 prohibited Iran from exporting arms. Resolution 2231 requires Iran to obtain Security Council approval to export arms for a maximum of five years.

Prohibits Iran from investing abroad in uranium mining, related nuclear technologies or nuclear capable ballistic missile technology, and prohibits Iran from developing, including testing, nuclear-capable ballistic missiles. (1929) Resolution 2231, "calls on" Iran to refrain from developing or testing ballistic missiles "designed to be capable of carrying a nuclear warhead" for a maximum of eight years from Adoption Day (until October 2023).

Resolution 1929 mandated that countries not export major combat systems to Iran, but does not bar sales of missiles that are not on the U.N. Registry of Conventional Arms. Resolution 2231 makes arms sales to Iran and exportation of arms from Iran subject to approval by the U.N. Security Council, for a maximum of five years from Adoption Day (until October 2020).

"Vigilance" (but not a ban) on making international lending to Iran and providing trade credits and other financing (1929). Not applicable under Resolution 2231.

Resolution 1929 calls on countries to inspect cargoes carried by Iran Air Cargo and Islamic Republic of Iran Shipping Lines—or by any ships in national or international waters—if there are indications they carry cargo banned for carriage to Iran. Searches in international waters would require concurrence of the country where the ship is registered. Resolution 2231 requires U.N. member states to continue to enforce all remaining restrictions on shipment of banned items to Iran.

A Sanctions Committee, composed of the 15 members of the Security Council, monitored implementation of all Iran sanctions and collected and disseminated information on Iranian violations and other entities involved in banned activities. A "panel of experts" was empowered by 1929 to assist the U.N. sanctions committee in implementing the resolution and previous Iran resolutions, and to suggest ways of more effective implementation.

Resolution 2231 and U.N. Sanctions Eased

endorsed the JCPOA and superseded all prior Iran-related resolutions as of Implementation Day (January 16, 2016).

lifted all U.N. sanctions discussed above. The Resolution did not continue the mandate of the "the panel of experts" and the panel ended its operations.

"calls on" Iran not to develop ballistic missiles "designed to be capable" of delivering a nuclear weapon for a maximum of eight years from Adoption Day (October 18, 2015). The restriction expires on October 18, 2023. And, 2231 is far less restrictive on Iran's missile program than is Resolution 1929. No specific sanctions are mandated in the Resolution if Iran conducted missile tests inconsistent with the Resolution. The JCPOA did not impose any specific missile-related requirements.

requires Security Council approval for Iran to export arms or to purchase any arms (major combat systems named in the Resolution) for a maximum of five years from Adoption Day (until October 18, 2020). The JCPOA does not impose arms requirements.

No change to the status of Resolution 2231 is anticipated as a consequence of the May 8, 2018, U.S. announcement that it will cease participating in the JCPOA.

Iran Compliance Status

U.N. reports on Iranian compliance with Resolution 223147 have noted assertions by several U.N. Security Council members, including the United States, that Iranian missile tests have been inconsistent with the Resolution. The reports required by Resolution 2231, as well as those required by other Resolutions pertaining to various regional crises, such as that in Yemen, also note several apparent violations of the Resolution's restrictions on Iran's exportation of arms. However, it is the responsibility of the Security Council to prescribe penalties on Iran for violations, and no U.N. Security Council sanctions or other actions have been taken against Iran in response to these possible violations.

U.N. List of Sanctioned Entities

Under Paragraph 6(c) of Annex B of Resolution 2231, entities sanctioned by the previous Iran-related Resolutions would continue to be sanctioned for up to eight years from Adoption Day (until October 2023). An attachment to the Annex listed 36 entities for which this restriction would no longer apply (entities "delisted") as of Implementation Day. Most of the entities dropped from the U.N. sanctions list were persons and institutions connected to the permitted aspects of Iran's nuclear program and its civilian economy. According to press reports, two entities not on the attachment list, Bank Sepah and Bank Sepah International PLC, also were delisted on Implementation Day by separate Security Council action.48 Paragraph 6(c) provides for the Security Council to be able to delist a listed entity at any time, as well as to add new entities to the sanctions list. Delisted entities are in italics in the table of U.N.-listed sanctioned entities at the end of the report.

U.S. Implementation of Iran Sanctions since 2014

The following sections discuss sanctions relief provided under the November 2013 interim nuclear agreement (JPA) and, particularly, the JCPOA. Later sections discuss the degree to which Iran is receiving the expected benefits of sanctions relief.

Sanctions Eased by the JPA

U.S. officials said that the JPA provided "limited, temporary, targeted, and reversible" easing of international sanctions. Under the JPA (in effect January 20, 2014-January 16, 2016):49

Iran's oil customers were not required reduce their oil purchases from Iran because waivers were issued for Section 1245(d)(1) of the National Defense Authorization Act for FY2012 (P.L. 112-81) and Section 1244c(1) of IFCA. The Obama Administration also stated it would not impose sanctions on foreign banks under Executive Orders 13622, 13645, and 13382 and related regulations. Waivers of ITRSHRA and ISA provisions were issued to permit transactions with NIOC. The European Union amended its regulations to allow shipping insurers to provide insurance for ships carrying oil from Iran.50

A waiver of Section 1245(d)(1) of IFCA allowed Iran to receive directly $700 million per month in hard currency from oil sales and $65 million per month to make tuition payments for Iranian students abroad (paid directly to the educational institutions).

Executive Orders 13622 and 13645 and several provisions of U.S.-Iran trade regulations were suspended, and several sections of IFCA were waived to enable Iran to sell petrochemicals and trade in gold and other precious metals, and to conduct transactions with foreign firms involved in Iran's automotive manufacturing sector.

Executive Order 13382 and certain provisions of U.S.-Iran trade regulations were suspended to equipment sales to Iran Air. The United States licensed some safety-related repairs and inspections for certain Iranian airlines and issued a new "Statement of Licensing Policy" to enable U.S. aircraft manufacturers to sell equipment to Iranian airlines.

The JPA required that the P5+1 "not impose new nuclear-related sanctions ... to the extent permissible within their political systems."51

Sanctions Easing Under the JCPOA and U.S. Reimposition

Under the JCPOA, sanctions relief occurred at Implementation Day (January 16, 2016), following IAEA certification that Iran had completed stipulated core nuclear tasks. U.S. secondary sanctions were waived or terminated, but most sanctions on direct U.S.-Iran trade. The secondary sanctions eased included:52 (1) sanctions that limited Iran's exportation of oil and sanction foreign sales to Iran of gasoline and energy sector equipment, and which limit foreign investment in Iran's energy sector; (2) financial sector sanctions; and (3) sanctions on Iran's auto sector and trading in the rial.The EU lifted its ban on purchases of oil and gas from Iran; and Iranian banks were readmitted to the SWIFT electronic payments system. All U.N. sanctions were lifted.

All of the U.S. sanctions that were eased will go back into effect by November 4, 2018, in accordance with the May 8, 2018, announcement that the United States will cease participating in the JCPOA. The Administration has stated that the purpose of reimposing the sanctions is to deny Iran the revenue with which to conduct regional malign activities and advance its missile, nuclear, and conventional weapons programs.

Some sanctions went back into effect on August 6, 2018 (effect 12:01 AM August 7) after a 90 day wind down period. These include U.S. sanctions on:

The JCPOA-related suspension of U.S. sanctions required issuing waivers of the laws below. These waivers were issued on January 16, 2016, and the Obama Administration and Trump Administration renewed all waivers by their prescribed date until the May 8 U.S. announcement of its exit from the JCPOA. Treasury and State Department documents issued on May 8 state that the waivers are all being revoked, and any post-May 8 waiver expiration deadlines have been rendered moot. All the provisions discussed below will go back into effect no later than November 4, 2018.

Iran Sanctions Act. The blanket energy/economic-related provisions of the ISA of P.L. 104-172, as amended. (Section 4(c)(1)(A) waiver provision). The WMD-related provision of ISA was not waived. The existing six-month waiver of ISA was last renewed on January 12, 2018, and was to expire on July 12, 2018.

FY2012 NDAA. Section 1245(d) of the National Defense Authorization Act for FY2012 (P.L. 112-81) that imposes sanctions on foreign banks of countries that do not reduce Iran oil imports. The latest 120-day waiver was issued by the Trump Administration on January 12, 2018, and was to expire on May 12, 2018.

Iran Threat Reduction Act. Sections 212 and 213 (the economy-related provisions) of Iran Threat Reduction and Syria Human Rights Act (P.L. 112-158) provisions. The human rights-related provisions of the law were not waived. The existing six-month waiver period was renewed on January 12, 2018, and was to expire on July 12, 2018.

Iran Freedom and Counter-proliferation Act. Sections 1244, 1245, 1246, and 1247 of the Iran Freedom and Counter-Proliferation Act (Subtitle D of P.L. 112-239). The latest 180-day waiver period was renewed on January 12, 2018, and was to expire on July 11, 2018.

The core provision of CISADA (P.L. 111-195) that sanctions foreign banks was not waived, but most Iranian banks have been "delisted" under various U.S. Executive Orders (13224 and 13382), thereby reopening many entities to the international financial system. Banks sanctioned for terrorism funding, (example: Bank Saderat) were not delisted. The Administration will be relisting all Iranian banks that were delisted on November 5, 2018.

Executive Orders: 13574, 13590, 13622, 13645, and Sections 5-7 and 15 of Executive Order 13628 were revoked outright by Executive Order 13716.54 The Orders were reinstated on August 6, 2018 in the issuing of a new Executive Order, 13846.

The United States "delisted" for sanctions the specified Iranian economic entities and personalities listed in Attachment III of the JCPOA, including the National Iranian Oil Company (NIOC), various Iranian banks, and many energy and shipping-related institutions. That step enabled foreign companies/banks to resume transactions with those entities without risking being penalized by the United States. The tables at the end of the report depicts in italics those entities delisted. Entities that were to be delisted on "Transition Day" October 2023) are in bold type. The Administration will be relisting all delisted entities by November 5, 2018.

Request for Congress to Lift Sanctions Outright. The JCPOA requires the U.S. Administration, by "Transition Day," to request that Congress lift virtually all of the sanctions that were suspended under the JCPOA. No outcome of such a request is mandated. The JCPOA requires all U.N. sanctions to terminate after 10 years of adoption ("Termination Day"). These provisions are rendered moot by the U.S. exit from the JCPOA.

U.S. Sanctions that Remained in Place

The JCPOA did not commit the United States to suspend U.S. sanctions on Iran for terrorism or human rights abuses, on foreign arms sales to Iran or sales of proliferation-sensitive technology such as ballistic missile technology, or on U.S.-Iran direct trade (with the selected exceptions of the latter discussed above). The sanctions that remained in place included:

E.O. 12959, the ban on U.S. trade with and investment in Iran;

E.O. 13224 sanctioning terrorism entities, any sanctions related to Iran's designation as a state sponsor or terrorism, and any other terrorism-related sanctions. The JCPOA does not commit the United States to revoke Iran's placement on the terrorism list;

the section of ISA that sanctions provision to Iran of WMD-and arms related technology to Iran;

Executive Orders E.O. 13438 on Iran's interference in Iraq and E.O. 13572 on repression in Syria;

Executive Orders (E.O. 13606 and 13628) and the provisions of CISADA, ITRSHRA, and IFCA that pertain to human rights or democratic change in Iran;

sanctions under various executive orders on the IRGC, military, proliferation-related, and human rights- and terrorism-related entities, which were not "delisted" from sanctions;

Treasury Department regulations barring Iran from access to the U.S. financial system. Foreign banks can pay Iran in dollars out of their existing dollar supply, and the Treasury Department revised its guidance in October 2016 to stress that such transactions are permitted.56

Other Mechanisms to "Snap-Back" Sanctions on Iran

Aside from reimposing U.S. sanctions as discussed above, sanctions might have also been reimposed by congressional action in accordance with President Trump's withholding of certification of Iranian compliance with the JCPOA. Such certification under the Iran Nuclear Agreement Review Act (INARA, P.L. 114-17), was withheld in October 2017 and January and April of 2018. Congress had the opportunity to act on legislation, under expedited procedures, to reimpose sanctions that were suspended. Congress did not take such action. For more information on these options, see CRS Report R44942, U.S. Decision to Cease Implementing the Iran Nuclear Agreement, by [author name scrubbed], [author name scrubbed], and [author name scrubbed].

Additionally, the JCPOA (paragraph 36 and 37) contains a mechanism for the "snap back" of U.N. sanctions if Iran does not satisfactorily resolve a compliance dispute. According to the JCPOA (and Resolution 2231), the United States (or any veto-wielding member of the U.N. Security Council) would be able to block a U.N. Security Council resolution that would continue the lifting of U.N. sanctions despite Iran's refusal to resolve the dispute. In that case "... the provisions of the old U.N. Security Council resolutions would be reimposed, unless the U.N. Security Council decides otherwise." There are no indications that the Administration plans to try to snap back U.N. sanctions under this process.

During 2010-2016, converging international views on Iran produced substantial global cooperation in pressuring Iran with sanctions. Some countries apparently joined the sanctions regime primarily as a means of heading off unwanted military action against Iran by the United States or by Israel, and some countries cooperated in order to preserve their close relationships with the United States. This section assesses international cooperation and compliance with U.S. sanctions, and cooperation with U.S. sanctions reimposed as a consequence of the May 8, 2018, U.S. exit from the JCPOA. However, most large trading partners of Iran, and including all the JCPOA parties, publicly opposed the U.S. decision to exit the JCPOA and have sought to keep their companies engaged in the Iran market in order to continue to provide the JCPOA's economic benefits to Iran.

Executive Order 13608 of May 1, 2012, gives the Department of the Treasury the ability to identify and sanction (cutting them off from the U.S. market) foreign persons who help Iran (or Syria) evade U.S. and multilateral sanctions. On January 10, 2013, the Department of the Treasury's Office of Foreign Assets Control issued an Advisory to highlight Iran's use of hawalas (traditional informal banking and money exchanges) in the Middle East and South Asia region to circumvent financial sanctions. Because the involvement of an Iranian client is often opaque, banks have sometimes inadvertently processed hawala transactions involving Iranians.

A comparison between U.S., U.N., and EU sanctions against Iran is contained in Table 3 below. Broader issues of Iranian foreign policy can be found in CRS Report R44017, Iran's Foreign and Defense Policies, by [author name scrubbed].

European Union (EU)

After the passage of Resolution 1929 in June 2010, European Union (EU) sanctions on Iran became nearly as extensive as those of the United States This was a clear contrast from most of the 1990s, when the EU countries refused to join the 1995 U.S. trade and investment ban on Iran, and (along with Japanese creditors) rescheduled $16 billion in Iranian debt bilaterally, in spite of Paris Club rules that call for multilateral rescheduling. In July 2002, Iran tapped international capital markets for the first time since the Islamic revolution, selling $500 million in bonds to European banks. During 2002-2005, there were negotiations between the EU and Iran on a "Trade and Cooperation Agreement" (TCA) that would have lowered the tariffs or increased quotas for Iranian exports to the EU countries.58

Under the JCPOA, EU sanctions, most of which were imposed in 2012, were lifted, including:

the ban on oil and gas imports from Iran. Collectively, EU countries bought about 600,000 barrels per day of Iranian oil in 2011, about a quarter of Iran's total oil exports.Oil imports from Iran resumed in March 2016, and returned nearly to those levels.

a ban on insurance for shipping oil or petrochemicals from Iran and a freeze on the assets of several Iranian firms involved in shipping.

a ban on trade with Iran in gold, precious metals, diamonds, and petrochemicals.

a freeze of the assets of Iran's Central Bank (although transactions had been permitted for approved civilian trade)

a ban on transactions between European and all Iranian banks (in place unless specifically authorized) and on short-term export credits, guarantees, and insurance.

a ban on exports to Iran of graphite, semi-finished metals such as aluminum and steel, industrial software, shipbuilding technology, oil storage capabilities, and flagging or classification services for Iranian tankers and cargo vessels.

SWIFT: The cutoff of 14 EU-designated Iranian banks from the Brussels-based SWIFT electronic payments system was lifted, and the Iranian banks resumed accessing the system in February 2016. Section 220 of the ITRSHRA required reports on electronic payments systems, such as the Brussels-based SWIFT (Society of Worldwide Interbank Financial Telecommunications), that do business with Iran, but does not mandate sanctions against such systems. In March 2012, SWIFT acceded to an EU requested that SWIFT cut off sanctioned Iranian banks from the network.59 Some Iranian banks were still able to conduct electronic transactions with the European Central Bank via the "Target II" system. EU diplomats indicate they will not ask SWIFT to expel Iranian banks but SWIFT is run by an independent Board and might decide to do so in order not to risk U.S. penalties.

A large number of entities were "delisted" from sanctions by the EU on Implementation Day and therefore relieved from EU sanctions. The entities had been sanctioned by EU Council decisions and regulations over the years. EU diplomats have indicated they will not relist any delisted entities in cooperation with the U.S. exit from the JCPOA.

The following EU sanctions remained in place:

an embargo on sales to Iran of arms, missile technology, other proliferation-sensitive items, and gear for internal repression.

a ban on 84 Iranian persons and one entity—all designated for human rights abuses or supporting terrorism—from visiting EU countries, and the freeze on their EU-based assets.

U.S. JCPOA Exit-Driven Divestment

EU diplomats have said that none of the EU sanctions will be reimposed by EU governments in concert with the U.S. exit from the JCPOA. For philosophical and possibly also economic reasons, European diplomats have indicated that they intend to try to protect their economic relations with Iran despite the U.S. pullout from the JCPOA. On August 6, 2018, a 1996 EU "blocking statute" took effect which seeks to protect EU firms from reimposed U.S. sanctions.

With the blocking statute widely assessed as likely to provide only limited protection from U.S. sanctions, EU diplomats have reportedly sought country-level or company-level waivers or exemptions from reimposed U.S. sanctions, but Administration officials have indicated that the Trump Administration is not inclined to issue any waivers or exemptions. Apparently seeking to avoid risk to their position in the large U.S. market, 100 companies - mostly in Europe - have announced they are leaving Iran. Some of the post-2016 European investments in/transactions with Iran that are being unwound or which might be vulnerable to reimposed U.S. sanctions on Iran include:60

Post JCPOA, Renault and Citroen of France announced nearly $1 billion in investments in a joint venture (with two Iranian firms) to boost Renault's car production capacity in Iran to 350,000 cars per year. These companies have suspended the joint ventures as a result of the reimposition of U.S. sanctions.

Scania of Sweden established a factory in Iran to supply the country with 1,350 buses.

German industrial giant Siemens signed an agreement in March 2016 with Iranian firm Mapna to transfer technology to produce gas turbines in Iran. The firm also has signed contacts to upgrade Iran's railways. Siemens said subsequent to the U.S. JCPOA exit that it would pursue no new Iranian business. Italy's Danieli industrial conglomerate and Gruppo Ventura said they would halt existing projects or new orders.

On August 6, 2018, Daimler (manufacturer of Mercedes Benz autos) announced it was suspending its activities in Iran "until further notice," adding that its Iran business was already "very limited."

In July 2018, at U.S. request, and even though U.S. financial sanctions do not resume effect until November 4, 2018, Germany's central bank (Deutsche Bundesbank) introduced a rule change that will block Iran's planned withdrawal of $400 million in cash from the Euorpaische-Iranische Handlesbank (EIH). EIH is reportedly at least partly owned by Iran and has often partnered on transactions with the Bundesbank. (EIH was "de-listed" from sanctions by the United States to implement the JCPOA, but will be re-listed as of November 5, 2018.)61

Norway's Saga Energy (Norway is not in the EU) signed a $3 billion deal to build solar power plants in Iran.

Italy's FS signed a $1.4 billion agreement to build a high speed railway between Qom and Arak.

On energy issues: Total SA has said it would exit a nearly $5 billion energy investment in South Pars gas field, and it is likely to transfer its stake to its joint venture partner, China National Petroleum Corporation (CMPC). Several European oil refiners have announced cuts - or consideration of cuts – in purchases of Iranian oil, including: ENI and Saras SpA of Italy; Royal Dutch Shell of the Netherlands; Repsol and Cepsa of Spain; and Hellenic Petroleum of Greece. OMV of Austria announced it would halt energy development work.

Among banks: The following have announced they would cease transactions with Iran: DZ Bank and Allianz of Germany; Oberbank of Austria; and Banque Wormser Freres of France.

Hapag-Lloyd of Germany and Denmark's AP Moller-Maersk have announced they would cease shipping services to Iran.

China and Russia

Russia and China, two permanent members of the U.N. Security Council, historically have imposed only those sanctions required by Security Council resolutions. Both countries' governments, which are parties to the JCPOA, have said they will not cooperate with reimposed U.S. secondary sanctions in concert with the U.S. pullout from the JCPOA. Many observers expect that, because companies in both countries have limited U.S. exposure and are strongly influenced by their governments, much of Iran's trade and economic engagement will shift to China and Russia from EU countries and Japan and South Korea.62

Russia

Increasingly close politically primarily on the issue of the conflict in Syria, Iran and Russia have discussed expanding energy and trade cooperation. The two countries reportedly agreed on broad energy development deals during President Putin's visit to Tehran in late October 2017, with an estimated investment value of up to $30 billion,63 although the degree of likely implementation remains uncertain.

In April 2015, Russia lifted its own restriction on delivering the S-300 air defense system that it sold Iran in 2007 but refused to deliver after Resolution 1929 was adopted—even though that Resolution technically did not bar supply of that defensive system. In April 2016, Russia began delivering the five S-300 batteries. Iran's Defense Minister visited Russia in February 2016 to discuss a possible purchase of major combat systems—a sale that would require an unlikely approval of the U.N. Security Council. Alternatively, the two countries might complete the sale without such approval, presumably calculating a limited penalty for doing so. There has been no announcement that such sales have been concluded, to date.

China

China is Iran's largest oil customer and is pivotal to the Trump Administration effort to reduce Iran's revenue from oil sales. But, as noted above, China's government has said it will not instruct China's firms to exit the Iran market. China is widely considered by experts as unlikely to cut its oil purchases from Iran substantially to comply with the reimposed sanctions, and there is speculation that China might even increase Iran oil imports as Iran discounts the price of its oil in order to entice buyers.

Pre-JCPOA, during 2012-2014 China cut its buys of oil from Iran to about 435,000 barrels per day from its 2011 average of nearly 600,000 barrels per day. The State Department asserted that, because China was the largest buyer of Iranian oil, percentage cuts by China had a large impact in reducing Iran's oil sales by volume and China merited a Section 1245 (P.L. 112-81) sanctions exemption. Since sanctions were lifted, China has increased its purchases of Iranian oil to levels that exceed those of 2011. Several Chinese energy firms that invested in Iran's energy sector put those projects on hold in 2012, but resumed or considered resuming work in earnest, subject to energy market considerations, after sanctions were eased in 2016. Chinese firms might also take over some investments in Iran's energy sector that EU firms will abandon in order to avoid the risk of reimposed U.S. sanctions.

During 2012-2016, China settled much of its trade balance with Iran with goods rather than hard currency. Doing so was highly favorable to China financially. Press reports indicated that Iran's automotive sector—the largest industrial sector aside from the energy sector—obtained a significant proportion of its parts from China, and subsidiaries of two China-based companies, Geelran and Chery, produce cars in Iran. Iran's auto production fell about 60% during 2011-2013 because of sanctions, but recovered somewhat after the JPA went into effect.64 Iran's auto parts imports increased as Iran was able to obtain at least some trade financing. Iran and China also have a separate escrow account to pay for China's infrastructure projects in Iran, such as the long Niayesh Tunnel, funded by about $20 billion of Iran's hard currency reserves.

In January 2016, days after Implementation Day, China's President Xi Jinping visited Iran during a trip to the Middle East region, and he indicated that China sees Iran as a vital link in an effort to extend its economic influence westward through its "One Belt, One Road" initiative. Chinese firms and entrepreneurs are integrating Iran into this vision by modernizing Iran's rail and other infrastructure, particularly where that infrastructure links to that of neighboring countries, including the Sultanate of Oman, funded by loans from China.65Iran's place in this initiative offers China's government and firms further incentive to avoid cooperating with reimposed U.S. sanctions.

In April 2018, the Commerce Department (Bureau of Industry and Security, BIS, which administers Export Administration Regulations) issued a denial of export privileges action against China-based ZTE Corporation and its affiliates. The action was taken on the grounds that ZTE did not uphold the terms of March 2017 settlement agreement with BIS over ZTE's shipment of prohibited U.S. telecommunications technology to Iran (and North Korea).

Japan/Korean Peninsula/Other East Asia

During 2010-2016, in part in deference to their alliances with the United States, Japan and South Korea enforced sanctions on Iran similar to those imposed by the United States and the EU. Both countries cut imports of Iranian oil sharply after 2011. Banks in the two countries were the repositories of a large part of the approximately $115 billion in foreign exchange that Iran held abroad - a balance that represents payments for oil shipments. Since 2016, both countries continued to import Iranian oil at about half of 2011 volumes, and Iran has been able to access funds in banks in both countries.

Both countries—and their companies—have historically been unwilling to undertake transactions with Iran that are violations of U.S. secondary sanctions. Firms in both countries are likely to cease transactions with Iran that could violate U.S. sanctions once U.S. sanctions go back into full effect by November 4, 2018. Possibly to avoid economic disruption, both countries have asked the Trump Administration for some exceptions to reimposed U.S. sanctions. For example, South Korea depends heavily on Iranian exports of condensates (a petroleum product sometimes considered as crude oil), and has asked to be able to import condensates from Iran at existing levels. Administration officials reportedly are considering the exception requests. 66

The following Japanese and South Korean firms have announced their postures following the U.S. exit from the JCPOA:

Daelim of South Korea has terminated a $2 billion contract to expand an Iranian oil refinery.

Car companies Mazda and Toyota of Japan and Hyundai of South Korea have suspended joint ventures to produce cars in Iran.

Among oil importers: Hanwha Total Petrochemical of South Korea and Fuji Oil and JXTG of Japan have said they are considering ending purchases of crude oil from Iran.67

Among banks: South Korea's Woori Bank and Industrial Bank of Korea have partly suspended transactions with Iran. Nomura Holdings of Japan has take a similar position.

Japan exports to Iran significant amounts of chemical and rubber products, as well as consumer electronics. South Korean firms have been active in energy infrastructure construction in Iran, and its exports to Iran are mainly iron, steel, consumer electronics, and appliances. In 2018, possibly due to partial Saudi ownership, the South Korean conglomerate POSCO withdrew from a 2016 deal to build a steel plant in Iran's free trade zone at the port of Chahbahar.

North Korea

North Korea, like Iran, has been subject to significant international sanctions. North Korea has never pledged to abide by international sanctions against Iran, and it reportedly cooperates with Iran on a wide range of WMD-related ventures, particularly the development of ballistic missiles. A portion of the oil that China buys from Iran (and from other suppliers) is reportedly sent to North Korea, but it is not known if North Korea buys any Iranian oil directly. The potential for North Korea to try to buy Iranian oil illicitly increased in the wake of the adoption in September 2017 of U.N. Security Council sanctions that limit North Korea's importation of oil, but there are no publicly known indications that it is doing so. While serving as Iran's president in 1989, the current Supreme Leader, Ayatollah Ali Khamene'i, visited North Korea. North Korea's titular head of state Kim Yong Nam attended President Rouhani's second inauguration in August 2017, and during his visit signed various technical cooperation agreements of unspecified scope.68

Taiwan

Taiwan has generally been a small buyer of Iranian oil. It resumed imports of Iranian oil after sanctions were eased in 2016. In the wake of the May 8, 2018, U.S. exit from the JCPOA, a Taiwan refiner, Formosa Petrochemical Corp, said it is considering ending imports of Iran's oil.

South Asia: India, Pakistan, and Afghanistan

India

During 2011-2016, India implemented U.N.-mandated sanctions against Iran and generally cooperated with multilateral efforts to use sanctions to achieve a nuclear agreement with Iran. Its private sector assessed Iran as a "controversial market"—a term used by many international firms to describe markets that entail reputational and financial risks. India's central bank ceased using a Tehran-based regional body, the Asian Clearing Union, to handle transactions with Iran, and the two countries agree to settle half of India's oil buys from Iran in local currency, the rupee. Iran used the rupee proceeds to buy Indian wheat, pharmaceuticals, rice, sugar, soybeans, auto parts, and other products.

India reduced its imports of Iranian oil substantially after 2011, reducing its purchases to 6% of its oil imports by 2013, down from over 16% in 2008. India incurred significant costs to retrofit refineries that were handling Iranian crude. However, since sanctions were eased, India's oil imports from Iran increased to about 600,000 bpd - well above 2011 levels. Indian firms ended or slowed work on investments in Iranian oil and gas fields during 2012-2016, but reportedly resumed work after sanctions were lifted. After international sanctions were lifted, India reportedly also paid Iran the $6.5 billion it owed for oil purchased during 2012-2016.69

The degree to which Indian firms and the government of India will cooperate with reimposed U.S. sanctions is not certain. Indian leaders assert that Iran did not violate the JCPOA and sanctions should not be reimposed on it.70 In early June 2018, the two countries again agreed to use the rupee in order to maintain economic engagement. Nonetheless:

Several major Indian refiners, including Reliance Ltd. and Indian Oil Corp have announced they are considering cutting oil buys from Iran. They cited a decision by the State Bank of India to cease transactions with Iran as complicating efforts to stay engaged with Iran.

In 2015, India and Iran agreed that India would help develop Iran's Chahbahar port that would enable India to trade with Afghanistan unimpeded by Pakistan. With sanctions lifted, the project no longer entails risk to Indian firms involved. In May 2016, Indian Prime Minister Narendra Modi visited Iran and signed an agreement to invest $500 million to develop the port and related infrastructure. Construction at the port is proceeding. During a late June 2018 visit to India, U.S. Ambassador to the United Nations Nikki Haley said that: "We know the port has to happen and the United States is going to work with India to do that."71 This suggested the Administration would use the "Afghanistan reconstruction" exception under Section 1244(f) of IFCA to allow for firms to continue developing it.

Pakistan

One test of Pakistan's compliance with sanctions was a pipeline project that would carry Iranian gas to Pakistan—a project that U.S. officials on several occasions stated would be subject to ISA sanctions. Despite that threat, agreement on the $7 billion project was finalized on June 12, 2010, and construction was formally inaugurated in a ceremony attended by the Presidents of both countries on March 11, 2013. In line with an agreed completion date of mid-2014, Iran reportedly completed the pipeline on its side of the border. China's announcement in April 2015 of a $3 billion investment in the project seemed to remove financial hurdles to the line's completion, and the JCPOA removed sanctions impediments to the project.72 However, during President Hassan Rouhani's visit to Pakistan in March 2016, Pakistan still did not commit to complete the line, and observers note that there are few indications of progress on the project. In 2009, India dissociated itself from the project over stated concerns about the security of the pipeline, the location at which the gas would be transferred to India, pricing of the gas, and tariffs.

Turkey/South Caucasus

Iran has substantial economic relations with Turkey and the countries of the South Caucasus.

Turkey

Turkey buys about 40% of its oil from Iran, and bought about 6% of its total gas imports from Iran in 2017. Turkey's leaders have said that Iran was complying with the JCPOA and that Turkey will not cooperate with reimposed U.S. sanctions.

Turkey did reduce purchases of oil from Iran during 2012-2016, but its purchases returned to 2011 levels after sanctions on Iran were eased in 2016. Turkey also is Iran's main gas customer via a pipeline built in 1997, which at first was used for a swap arrangement under which gas from Turkmenistan was exported to Turkey. Turkey

Even though direct Iranian gas exports to Turkey through the line began in 2001 (with additional such exports through a second pipeline built in 2013) no ISA sanctions were imposed on the grounds that the gas supplies were crucial to Turkey's energy security. Prior to the October 2012 EU decision to bar purchases of Iranian gas, this pipeline was a conduit for Iranian gas exports to Europe (primarily Bulgaria and Greece).

Pre-JCPOA, in response to press reports that Turkey's Halkbank was settling Turkey's payments to Iran for energy with gold, U.S. officials testified on May 15, 2013, that the gold going from Turkey to Iran consists mainly of Iranian private citizens' purchases of Turkish gold to hedge against the value of the rial. A U.S. criminal case involves a dual Turkish-Iranian gold dealer, arrested in the United States in 2016, who allegedly violated U.S. sanctions prohibiting helping Iran deal in precious metals.

Among past cases of possible Turkish violations of Iran sanctions, on November 7, 2016, the U.S. Attorney for New York's Southern District indicted several individuals for using money services businesses in Turkey and in the UAE for conspiring to conceal from U.S. banks transactions on behalf of and for the benefit of sanctioned Iranian entities, including Mahan Air.73 On January 6, 2014, the Commerce Department blocked a Turkey-based firm (3K Aviation Consulting and Logistics) from re-exporting two U.S.-made jet engines to Iran's Pouya Airline.74

Caucasus: Azerbaijan, Armenia, and Georgia

The Clinton and George W. Bush Administrations used the threat of ISA sanctions to deter oil pipeline routes involving Iran and thereby successfully promoted an alternate route from Azerbaijan (Baku) to Turkey (Ceyhan). The route became operational in 2005. Section 6 of Executive Order 13622 exempts from sanctions any pipelines that bring gas from Azerbaijan to Europe and Turkey.

Iran's relations with Azerbaijan—even though that country is inhabited mostly by Shiite Muslims—are hindered by substantial political and ideological differences. Iran and Azerbaijan have in recent years tried to downplay these differences for joint economic benefit, and they have been discussing joint energy and infrastructure projects among themselves and with other powers, including Russia. Iran and Armenia—Azerbaijan's adversary—have long enjoyed extensive economic relations: Armenia is Iran's largest direct gas customer, after Turkey. In May 2009, Iran and Armenia inaugurated a natural gas pipeline between the two, built by Gazprom of Russia. No determination of ISA sanctions was issued. Armenia has said its banking controls are strong and that Iran is unable to process transactions illicitly through Armenia's banks.75 However, observers in the South Caucasus assert that Iran is using Armenian banks operating in the Armenia-occupied Nagorno-Karabakh territory to circumvent international financial sanctions.76

Some press reports say that Iran might have used another Caucasian state, Georgia, to circumvent sanctions. IRGC-affiliated companies reportedly established dozens of front companies there to import dual-use items and to boost Iran's nonoil exports. However, Iran-Georgia economic ties reportedly diminished after 2012 in concert with increasing international sanctions on Iran.

The Persian Gulf countries of the Gulf Cooperation Council (GCC: Saudi Arabia, UAE, Qatar, Kuwait, Bahrain, and Oman) are oil exporters and close allies of the United States. As Iranian oil exports decreased after 2012, the Gulf states supplied the global oil market with additional oil. Since the U.S. exit from the JCPOA, U.S. officials have said that they are working with Gulf oil exporters to make sure the oil market is well supplied as U.S. officials work to reduce Iranian oil exports. However, largely in order not to antagonize Iran, the Gulf countries maintained relatively normal trade with Iran. Some Gulf-based shipping companies, such as United Arab Shipping Company reportedly continued to pay port loading fees to such sanctioned IRGC-controlled port operators as Tidewater, despite the imposition of sanctions on that company.78

The UAE has been particularly closely watched by U.S. officials because of the large presence of Iranian firms there. Several UAE-based firms have been sanctioned for efforts to evade sanctions, as noted in the tables at the end of the report. U.S. officials praised the UAE's March 1, 2012, ban on transactions with Iran by Dubai-based Noor Islamic Bank, which Iran reportedly used to process oil payments. Some Iranian gas condensates (120,000 barrels per day) were imported by Emirates National Oil Company (ENOC) and refined mostly into jet fuel. Subsequent to the May 8, 2018, U.S. exit from the JCPOA, ENOC officials said they are trying to find alternative supplies of the hydrocarbon products it buys from Iran.79

Iran and several of the Gulf states have had discussions on various energy and related projects, but few have materialized because of broad regional disputes between Iran and the Gulf states. Kuwait and Iran have held talks on the construction of a 350-mile pipeline that would bring Iranian gas to Kuwait, but the project does not appear to be materializing. Bahrain's discussions of purchasing Iranian gas have floundered over sharp political differences.80 Qatar and Iran share the large gas field in the Gulf waters between them, and their economic relations have become closer in light of the isolation of Qatar by three of its GCC neighbors, Saudi Arabia, UAE, and Bahrain. The only GCC state that has moved forward with economic joint ventures with Iran is Oman, particularly in the development of Oman's priority project to expand its port at Al Duqm port, which Oman and Iran envision as a major hub for regional trade. In September 2015, the two countries also recommitted to a gas pipeline joint venture.

Iraq

Iran has sought to use its close relations with Iraq's Shiite-dominated government to evade some sanctions. As noted above, the United States sanctioned an Iraqi bank that has cooperated with Iran's efforts, but lifted those sanctions when the bank reduced that business. Iraq presented the United States with a significant sanctions-related dilemma in July 2013, when it signed an agreement with Iran to buy 850 million cubic feet per day of natural gas through a joint pipeline that enters Iraq at Diyala province and would supply several power plants. No sanctions were imposed on the arrangement, which was agreed while applicable sanctions were still in effect. In May 2015, Iraq's Al Naser Airlines reportedly helped Mahan Air (sanctioned entity) acquire nine aircraft,81 and the Department of the Treasury sanctioned it and other entities involved.

Iran is supplying advisers and weapons to help Iraq try to defeat Islamic State forces. The Iranian support to the Iraqi government has not been sanctioned, even though Iranian arms exports remain prohibited by Resolution 2231.

Syria and Lebanon

Iran has had extensive economic relations with both Syria and Lebanon, where its key regional ally Lebanese Hezbollah is politically powerful. Most experts assess that the compliance of Syrian or Lebanese banks and other institutions with international sanctions against Iran was limited even during 2012-2015. Iran reportedly uses banks in Lebanon to skirt international financial sanctions, according to a wide range of observers, and these banks are among the conduits for Iran to provide financial assistance to Hezbollah as well as to the regime of Syrian President Bashar Al Assad. In January 2017, Iran and Syria signed a series of economic agreements giving Iranian firms increased access to Syria's mining, agriculture, and telecommunications sectors, as well as management of a Syrian port.82

Africa and Latin America

During the presidency of Ahmadinejad, Iran looked to several Latin American and African countries to try to circumvent international sanctions. For the most part, however, Iran's trade and other business dealings with these regions are apparently too modest to weaken the effect of international sanctions significantly.

World Bank Loans/WTO Accession Talks

The united approach to sanctions on Iran during 2010-2016 carried over to international lending to Iran. The United States representative to international financial institutions is required to vote against international lending, but that vote, although weighted, is not sufficient to block international lending. No new loans have been approved to Iran since 2005, including several environmental projects under the Bank's "Global Environmental Facility" (GEF). The initiative slated more than $7.5 million in loans for Iran to dispose of harmful chemicals.83 The 2016 lifting of sanctions increased international support for new international lending to Iran, but the U.S. exit from the JCPOA will likely lead to differences between the United States and other lenders over extending any new loans to Iran.

Earlier, in 1993, the United States voted its 16.5% share of the World Bank against loans to Iran of $460 million for electricity, health, and irrigation projects, but the loans were approved. To block that lending, the FY1994-FY1996 foreign aid appropriations (P.L. 103-87, P.L. 103-306, and P.L. 104-107) cut the amount appropriated for the U.S. contribution to the bank by the amount of those loans, contributing to a temporary halt in new bank lending to Iran. But, in May 2000, the United States' allies outvoted the United States to approve $232 million in loans for health and sewage projects. During April 2003-May 2005, a total of $725 million in loans were approved for environmental management, housing reform, water and sanitation projects, and land management projects, in addition to $400 million in loans for earthquake relief.

WTO Accession

An issue related to sanctions is Iran's request to join the World Trade Organization (WTO). Iran began accession talks in 2006 after the George W. Bush Administration dropped its objection to Iran's application as part of an effort to incentivize Iran to reach an interim nuclear agreement. The lifting of sanctions presumably paves the way for talks to accelerate, but the accession process generally takes many years. Accession generally takes place by consensus of existing WTO members. Iran's accession might be complicated by the requirement that existing members trade with other members; as noted above, the U.S. ban on trade with Iran remains in force. The Trump Administration does not advocate Iran's admission to that convention.

Table 3. Comparison Between U.S., U.N., and EU and Allied Country Sanctions (Prior to Implementation Day)

U.S. Sanctions

U.N. Sanctions

EU and Other Allied Countries

General Observation: Most sweeping sanctions on Iran of virtually any country in the world

As of 2010, U.N. sanctions were intended to give countries justification to cooperate with U.S. secondary sanctions.

Post-JCPOA: Resolution 2231 is the only operative Resolution on Iran.

EU closely aligned its sanctions tightening with that of the United States. Most EU sanctions lifted in accordance with the JCPOA, although some sanctions on arms, dual-use items, and human rights remain.

Japan, South Korean, and China sanctions also became extensive but were almost entirely lifted in concert with the JCPOA.

Ban on U.S. Trade with,Investment in, and Financing forIran:Executive Order 12959 bans (with limited exceptions) U.S. firms from exporting to Iran, importing from Iran, or investing in Iran.

U.N. sanctions did not at any time ban civilian trade with Iran or general civilian sector investment in Iran.

No comprehensive EU ban on trade in civilian goods with Iran was imposed at any time.

Japan and South Korea did not ban normal civilian trade with Iran.

Sanctions on Foreign Firms that Do Business with Iran's Energy Sector: The Iran Sanctions Act, P.L. 104-172, and subsequent laws and executive orders, discussed throughout the report, mandate sanctions on virtually any type of transaction with/in Iran's energy sector.

No U.N. equivalent existed. However, Resolution 1929 "not[es] the potential connection between Iran's revenues derived from its energy sector and the funding of Iran's proliferation-sensitive nuclear activities." This wording was interpreted as providing U.N. support for countries to ban their companies from dealing with Iran's energy sector.

With certain exceptions, the EU banned almost all dealings with Iran's energy sector after 2011. These sanctions now lifted.

Japanese and South Korean measures banned new energy projects in Iran and called for restraint on ongoing projects. South Korea in December 2011 cautioned its firms not to sell energy or petrochemical equipment to Iran. Both cut oil purchases from Iran sharply. These sanctions now lifted.

Ban on Foreign Assistance:

U.S. foreign assistance to Iran—other than purely humanitarian aid—is banned under §620A of the Foreign Assistance Act, which bans U.S. assistance to countries on the U.S. list of "state sponsors of terrorism." Iran is also routinely denied direct U.S. foreign aid under the annual foreign operations appropriations acts (most recently in §7007 of division H of P.L. 111-8).

No U.N. equivalent

EU measures of July 27, 2010, banned grants, aid, and concessional loans to Iran. Also prohibited financing of enterprises involved in Iran's energy sector. These sanctions now lifted.

Japan and South Korea measures did not specifically ban aid or lending to Iran.

Ban on Arms Exports to Iran:

Iran is ineligible for U.S. arms exports under several laws, as discussed in the report.

As per Resolution 1929 (paragraph 8), as superseded by Resolution 2231, Security Council approval is required to sell Iran major weapons systems.

EU sanctions include a comprehensive ban on sale to Iran of all types of military equipment, not just major combat systems. Arms embargo remains post-JCPOA.

No similar Japan and South Korean measures announced, but neither has exported arms to Iran.

Restriction on Exports to Iran of "Dual Use Items":

Primarily under §6(j) of the Export Administration Act (P.L. 96-72) and §38 of the Arms Export Control Act, there is a denial of license applications to sell Iran goods that could have military applications.

U.N. resolutions on Iran banned the export of many dual-use items to Iran. Resolution 2231 sets up a procurement network for the P5+1 to approve of all purchases for Iran's ongoing nuclear program.

EU banned the sales of dual use items to Iran, including ballistic missile technology, in line with U.N. resolutions. These restrictions generally remain post-JCPOA.

Japan and S. Korea have announced full adherence to strict export control regimes when evaluating sales to Iran. These restrictions generally remain post-JCPOA.

Sanctions Against Lending to Iran:

Under §1621 of the International Financial Institutions Act (P.L. 95-118), U.S. representatives to international financial institutions, such as the World Bank, are required to vote against loans to Iran by those institutions.

Resolution 1747 (oper. paragraph 7) requested, but did not mandate, that countries and international financial institutions refrain from making grants or loans to Iran, except for development and humanitarian purposes. (No longer applicable.)

The July 27, 2010, measures prohibited EU members from providing grants, aid, and concessional loans to Iran, including through international financial institutions. Sanctions lifted post-JCPOA.

Japan and South Korea banned medium- and long-term trade financing and financing guarantees. Short-term credit was still allowed. These sanctions now lifted.

Sanctions Against the Sale of Weapons of Mass Destruction-Related Technology to Iran:

Several laws and regulations provide for sanctions against entities, Iranian or otherwise, that are determined to be involved in or supplying Iran's WMD programs (asset freezing, ban on transaction with the entity).

Resolution 1737 (oper. paragraph 12) imposed a worldwide freeze on the assets and property of Iranian WMD-related entities named in an Annex to the Resolution. Each subsequent resolution expanded the list of Iranian entities subject to these sanctions.

The EU measures imposed July 27, 2010, commit the EU to freezing the assets of WMD-related entities named in the U.N. resolutions, as well as numerous other named Iranian entities. Most of these restrictions remain.

Japan and South Korea froze assets of U.N.-sanctioned entities. Most of these restrictions have been lifted.

Ban on Transactions with Terrorism Supporting Entities:

Executive Order 13224 bans transactions with entities determined by the Administration to be supporting international terrorism. Numerous entities, including some of Iranian origin, have been designated.

No direct equivalent, but Resolution 1747 (oper. paragraph 5) bans Iran from exporting any arms. Resolution 2231 continues that restriction for a maximum of five years.

No direct equivalent, but many of the Iranian entities named as blocked by the EU, Japan, and South Korea overlap or complement Iranian entities named as terrorism supporting by the United States.

Japan and S. Korea did not impose specific terrorism sanctions on Iran.

Human Rights Sanctions:

CISADA provides for a prohibition on travel to the U.S., blocking of U.S.-based property, and ban on transactions with Iranians determined to be involved in serious human rights abuses against Iranians since the June 12, 2009, presidential election there, or with persons selling Iran equipment to commit such abuses.

No U.N. sanctions were imposed on Iran for terrorism or human rights abuses.

EU sanctions include 87 named Iranians subject to a ban on travel to the EU countries. The EU also retains a ban on providing equipment that can be used for internal repression.

Japan and South Korea have announced bans on named Iranians involved in WMD programs.

Restrictions on Iranian Shipping:

Under Executive Order 13382, the U.S. Department of the Treasury has named Islamic Republic of Iran Shipping Lines and several affiliated entities as entities whose U.S.-based property is to be frozen.

Resolution 1803 and 1929 authorize countries to inspect cargoes carried by Iran Air and Islamic Republic of Iran Shipping Lines (IRISL)—or any ships in national or international waters—if there is an indication that the shipments include goods whose export to Iran is banned.

These resolutions no longer apply.

The EU measures announced July 27, 2010, bans Iran Air Cargo from access to EU airports. The measures also freeze the EU-based assets of IRISL and its affiliates. Insurance and reinsurance for Iranian firms are banned. These sanctions now lifted.

Japan and South Korean measures took similar action against IRISL and Iran Air. Sanctions now lifted.

Banking Sanctions:

During 2006-2011, several Iranian banks have been named as proliferation or terrorism supporting entities under Executive Orders 13382 and 13224, respectively (see Table 4 at end of report).

CISADA prohibits banking relationships with U.S. banks for any foreign bank that conducts transactions with Iran's Revolutionary Guard or with Iranian entities sanctioned under the various U.N. resolutions.

Japan and South Korea took similar measures South Korea imposed the 40,000 Euro threshhold requiring authorization. Japan and S. Korea froze the assets of 15 Iranian banks; South Korea targeted Bank Mellat for freeze. These sanctions now lifted.

Ballistic Missiles: U.S. proliferations laws provide for sanctions against foreign entities that help Iran with its nuclear and ballistic missile programs.

Resolution 1929 (paragraph 9) prohibited Iran from undertaking "any activity" related to ballistic missiles capable of delivering a nuclear weapon. Resolution 2231 calls on Iran not to develop or launch ballistic missiles designed to be capable of carrying a nuclear weapon.

EU measures on July 27, 2010, required adherence to this provision of Resolution 1929. EU has retained ban on providing ballistic missile technology to Iran in post-JCPOA period.

Effectiveness of Sanctions on Iranian Behavior

It can be argued that the question "are sanctions on Iran 'working'?" should be assessed based on an analysis of the goals of the sanctions. The following sections try to assess the effectiveness of Iran sanctions according to a number of criteria.

Effect on Iran's Nuclear Program and Strategic Capabilities

Iran's acceptance of and compliance with the JCPOA is widely assessed as evidence that sanctions did alter Iran's behavior on one key policy: it's willingness to accept restraints on its nuclear program, at least for a long period of time. Hassan Rouhani was elected president of Iran in June 2013 in part because of his stated commitment to achieving an easing of sanctions and ending Iran's international isolation – a commitment that would undoubtedly require accepting such nuclear restraints. Still, as to the long term effects of sanctions, the intelligence community assesses that it "does not know" whether Iran plans to eventually develop a nuclear weapon.84

It remains uncertain whether Iran will remain in the JCPOA despite the U.S. exit from the JCPOA. This question is examined in detail in: CRS Report R43333, Iran Nuclear Agreement and U.S. Exit, by [author name scrubbed] and [author name scrubbed] and CRS In Focus IF10916, Efforts to Preserve Economic Benefits of the Iran Nuclear Deal, by [author name scrubbed], [author name scrubbed], and [author name scrubbed]. There are also no indications that Iranian leaders will answer the U.S. call for negotiations on a new agreement that would cover not only Iran's nuclear program but also its missile program and its regional malign activities. Both President Trump and President Rouhani have publicly said they would accept bilateral talks without conditions, but those statements are generally contradicted by those of their top aides and other statements indicating the other's demands are unacceptable.

There is little evidence that even the strict sanctions of 2011-2016 slowed Iran's nuclear program or its missile program. And, even though U.S. and EU sanctions remain on Iran's missile programs, U.S. intelligence officials have testified that Iran continues to expand the scale, reach, and sophistication of its ballistic missile arsenal. Still, some U.S. officials have asserted that Iran's nuclear and missile programs might have advanced faster were sanctions not imposed.85

Sanctions have apparently prevented Iran from buying significant amounts of major combat systems since the early 1990s. Iran has been able to acquire defensive systems; Russia delivered the S-300 air defense system in April 2016. However, Iran's indigenous arms industry has grown over the past two decades and Iran might have acquired some systems from foreign suppliers such as North Korea that do not abide by U.N. restrictions.86 U.S. intelligence directors testified in February 2018 that Iran is fielding increasingly lethal weapons systems, including more advanced naval mines and ballistic missiles, small but capable submarines, armed UAVs (unmanned aerial vehicles), coastal defense cruise missile batteries, attack craft, and anti-ship ballistic missiles.87

Effects on Iran's Regional Influence

Iran's regional influence has increased since sanctions were eased in early 2016, but it is difficult to discern any connection between that observation and sanctions relief. In his May 8 announcement of withdrawal from the JCPOA, President Donald Trump stated that Iran's defense budget had increased 40% since Implementation Day. However, it is not clear how much, if any, of the extra defense funds might have contributed to Iran's regional activities versus other programs. The President stated on August 6, 2018, the day that many U.S. sanctions were reimposed on Iran, that "Since the deal was reached, Iran's aggression has only increased. The regime has used the windfall of newly accessible funds it received under the JCPOA to build nuclear-capable missiles, fund terrorism, and fuel conflict across the Middle East and beyond….The Reimposition of nuclear-related sanctions through today's actions further intensifies pressure on Tehran to change its conduct.88

Strict sanctions during 2012-2016, and U.N. restrictions and U.S. sanctions against Iran's exportation of weaponry, did not prevent Iran from supplying arms, including missiles, to its regional allies, such as the Asad regime in Syria, the Houthi rebels in Yemen, Lebanese Hezbollah, or Shiite militia groups in Iraq. Iran apparently is able to manufacture domestically the weaponry it suppliers to such entities, and sanctions do not appear to be an effective tool to limit such Iranian efforts. Nor did sanctions prevent Iran from sending thousands of IRGC advisers to help the Asad regime in Syria beginning in 2013.

In terms of congressional oversight, a provision of the FY2016 Consolidated Appropriation (P.L. 114-113) requires an Administration report to Congress on how Iran has used the financial benefits of sanctions relief. And, a provision of the Iran Nuclear Agreement Review Act (P.L. 114-17) requires that a semiannual report on Iran's compliance with the JCPOA include information on any Iranian use of funds to support acts of terrorism.

Political Effects

No U.S. Administration, including the Trump Administration, has asserted that sanctions on Iran – or the reimposition of sanctions – were/are intended to bring about the change of Iran's regime, although some experts asserted that this should be the goal of sanctions. But, the support of Iranians seeking reintegration with the international community and sanctions relief helped propel Rouhani—the most moderate of the candidates permitted to run—to a first round victory in the June 2013 presidential election, and to reelection in May 2017. Many Iranians cheered the finalization of the JCPOA in July 15, 2015, undoubtedly contributing to Supreme Leader Khamene'i's acceptance of the deal.

Still, the IRGC and other hardliners control domestic security and the judiciary, and these factions have criticized Rouhani's compromises, particularly in light of the U.S. exit from the JCPOA. The security forces have continued to arrest U.S. and dual nationals and to prosecute Rouhani allies on various charges. In July 2018, the IRGC and Iran's parliament (Majles) called for cabinet changes to address economic mismanagement and the Majles has given Rouhani until early September to appear before it to answer questions about the economic situation.89 In July 2018, Rouhani replaced Iran's Central Bank governor as an apparent gesture to indicate responsiveness to economic concerns expressed by members of Iran's political establishment. Still, apparently out of hardliner concern that forcing Rouhani out could touch off massive unrest, there does not appear to be an imminent threat to Rouhani's grip on his office.

Some assert that the sanctions relief of the JCPOA played a role in the widespread unrest that erupted in Iran in late December 2017-January 2018. Sanctions relief, by some accounts, fed public expectations of economic conditions that exceed what they have experienced thus far. Others note that the unrest illustrates that sanctions relief of the JCPOA did not yield the domestic stability that Iran's regime perhaps expected to achieve from the nuclear accord. The U.S. pullout from the JCPOA on May 8 has begun to cause economic effects, discussed below, that led to protests in the Tehran bazaar in late June 2018 and subsequent demonstrations in several cities.

Human Rights-Related Effects

It is difficult to draw any direct relationship between sanctions and Iran's human rights practices. Recent human rights reports by the State Department and the U.N. Special Rapporteur on Iran's human rights practices generally assess that there has been some modest improvement in some of Iran's practices in recent years, particularly relaxation of enforcement of the public dress code for women. But the altered policies cannot necessarily be attributed to sanctions relief.

Since at least 2012, foreign firms have generally refrained from selling the Iranian government equipment to monitor or censor social media use. Such firms include German telecommunications firm Siemens, Chinese Internet infrastructure firm Huawei, and South African firm MTN Group. In October 2012, Eutelsat, a significant provider of satellite service to Iran's state broadcasting establishment, ended that relationship after the EU sanctioned the then head of the Islamic Republic of Iran Broadcasting (IRIB), Ezzatollah Zarghami. However, the regime retains the ability to monitor and censor social media use.

Economic Effects

Sanctions took a substantial toll on Iran's economy, and sanctions relief caused Iran's economy to rebound, although perhaps not to the extent that Iranians expected. Assessing the effects of the U.S. exit from the JCPOA will likely require time for most economic indicators to be accurately measured.

GDP Growth. Then-Treasury Secretary Jacob Lew told a Washington, D.C., research institute in April 2015 that Iran's gross domestic product (GDP) was 15%-20% smaller than it would have been had sanctions not been imposed.90 The unemployment rate rose to about 20% by 2014, and many additional Iranians were working but unpaid or partially paid. In 2015, Iran's GDP was about $400 billion at the official exchange rate ($1.4 trillion if assessed on a purchasing power parity [PPP] basis). IMF and outside economists report that Iran achieved about 7% growth during March 2016-March 2017,91 and a similar 7% growth rate was achieved for the March 2017-March 2018 period. However, estimates issued before the U.S. reimposition of sanctions predicted growth would moderate to about 4% during March 2018-March 2019. The reimposition of U.S. sanctions is almost certain to reduce growth below that 4% level, and perhaps even drive Iran back into recession.

Oil Exports and Availability for Export. As noted in Table 1, sanctions reduced Iran's crude oil sales about 60% from the 2.5 mbd level of 2011, causing Iran to lose over $160 billion in oil revenues from 2012 to 2015. Iran earned $120 billion from oil sales in 2011; about $35 billion in 2013; and, because of the fall in prices, even less in 2014 and 2015. The JPA capped Iran's crude oil exports at about 1.1 mbd.92 Since 2016, Iran has been able to export oil freely again and export volumes returned to nearly 2011 levels. Oil production also rebounded to nearly the 4 mbd level of production in 2011,93 from 2.7 mbd during 2012-2016. As shown in the table, the 2018 reimposition of U.S. sanctions has already begun to drive Iran's oil exports down, perhaps to less than 2 mbd. Iran has been exempted from an attempt by OPEC to increase oil prices by imposing production cuts on most of the cartel's members.

Banking. Global banks were slow to reenter the Iran market after the 2016 easing of sanctions because of (1) reported concerns that the United States might still sanction such transactions under remaining sanctions provisions; (2) a lack of transparency in Iran's financial sector; (3) lingering concerns over past financial penalties for processing Iran-related transactions in the U.S. financial system (see above); and (4) extra costs and procedures caused by the inability to process Iran-related transactions through the U.S. financial system and/or easily use dollars in Iran-related transactions. Iranian officials assert that the JCPOA (Paragraph 24) obligates the United States to remove any restrictions that prevent Iran from obtaining the full benefits of sanctions relief. Those banks that did re-enter the Iran market have, as a consequence of the U.S. exit from the JCPOA, already either stopped or are considering stopping their transactions with Iran.

Access to U.S. Dollars. In October 2016 the Treasury Department updated its guidance to make clear that, under the eased sanctions of the JCPOA, foreign financial institutions could use their own supply of dollars (not accessing the U.S. financial system to acquire the dollars) to conduct transactions with Iran. Still, foreign banks remained reluctant to handle Iran transactions, in part because most dollar transactions still require the involvement of U.S. correspondent accounts. Then-Treasury Secretary Lew in March and April 2016 suggested the Obama Administration was considering licensing transactions by foreign (non-Iranian) clearinghouses to acquire dollars that might facilitate transactions with Iran, without providing Iran with dollars directly.94 However, doing so was not required by the JCPOA and the Administration declined to take that step. Instead, the Obama Administration encouraged bankers to reenter the Iran market without fear of being sanctioned. The Trump Administration has not, at any time, expressed support for allowing Iran greater access to dollars, and the reimposition of U.S. sanctions has further reduced the willingness and ability of foreign firms to use dollars in transactions with Iran.

Shipping Insurance. Iran has been able since Implementation Day to obtain shipping insurance as a result of waivers given to numerous insurers, as discussed above. However, as of August 7, 2018, U.S.-based shipping re-insurers no longer have active U.S. waivers to participate in the insurance market for Iranian shipping, harming Iran's ability to obtain shipping insurance.

Hard Currency Accessibility. Not only did Iran's oil exports plummet from 2011 to 2014, but Iran could not access the hard currency it was being paid for its oil. By the time sanctions were lifted in January 2016, the total of Iranian hard currency reserves held in foreign banks stood at about $115 billion,95 and Iranian officials stated in February 2016 that they had gained access to the funds. Iran regained access to the SWIFT electronic payments system in early 2016, enabling Iran to move money internationally. Of this amount, about $60 billion is owed to creditors such as China ($20 billion) or to repay nonperforming loans extended to Iranian energy companies working in the Caspian and other areas in Iran's immediate neighborhood. Iran has kept most of its available reserves abroad for cash management purposes and to pay for imports, but Iran's foreign exchange reserves will again be restricted by foreign banks as U.S. sanctions go back into effect, making it likely that Iran will try to repatriate the funds before the wind-down period ends on November 4, 2018.

Currency Decline. Sanctions caused the value of the rial on unofficial markets to decline about 56% from January 2012 until January 2014. The election of Rouhani and the JPA agreement in 2013 caused the rial to stabilize at about 35,000 to the dollar. However, the approaching possibility of a U.S. reimposition of sanctions caused the rial to collapse to about 60,000 to the dollar in mid-April 2018. The rial value collapsed further to about 95,000 to the dollar at the August 6, 2018 end of the initial 90 day wind down period and reimposition of some of the U.S. sanctions. This caused the Tehran bazaar to largely shut down because of merchant inability to import goods or properly price merchandise. The shutdown triggered public demonstrations and prompted the government to ban the importation of about 1,400 different goods in order to preserve its supply of hard currency.

Inflation. The drop in value of the currency caused inflation to accelerate during 2011-2013. The estimated actual inflation rate was between 50% and 70% (a higher figure than that acknowledged by Iran's Central Bank). The sanctions relief of the JPA reduced the inflation rate to about 15% and inflation slowed to the single digits by June 2016, meeting the Central Bank's stated goal.96 However, in 2017, the inflation rate reportedly increased back to double digits, and turmoil surrounding the possible U.S. exit from the JCPOA caused inflation to increase to about 15% by late June 2018.

Industrial/Auto Production and Sales. Iran's light-medium manufacturing sector has been expanding in recent years, but is dependent on imported parts. Sanctions complicated obtaining trade credit and created difficulties for Iranian manufacturers, who had to prepay for imported parts often through circuitous mechanisms. Iran's production of automobiles fell by about 60% from 2011 to 2013. Press reports say that the auto sector, and manufacturing overall, rebounded since sanctions were lifted, but is declining again in light of the announced divestments by French auto makers following the U.S. exit from the JCPOA.

U.S.-Iran Trade. U.S.-Iran trade remains negligible. In 2015, the last full year before JCPOA implementation, the United States sold $281 million in goods to Iran and imported $10 million worth of Iranian products. The slight relaxation of the U.S. import ban stemming from the JCPOA likely accounts for the significant increase in imports from Iran in 2016 to $86 million. U.S. imports from Iran were about $63 million in 2017. However, U.S. exports to Iran remained low for all of 2016 and 2017 ($172 million and $137 million, respectively).

Iran's Economic Coping Strategies

Iran had some success mitigating the economic effect of sanctions, steps that also benefit Iran in the post-sanctions period and which are being used to try to cope with reimposed U.S. sanctions.

Promoting Nonoil Exports. Iran has promoted sales of nonoil products such as minerals, cement, urea fertilizer, and other agricultural and basic industrial goods. Nonoil exports now generate about two-thirds of the revenue required to fund Iran's imports of goods and services, and reducing Iran's dependence on oil exports to fund its annual budget.97

Oil Products/Condensate Sales. Iran increased sales of oil products such as petrochemicals and condensates, earning about $4.7 billion in revenue from that source by 2016.98 Condensates are not generally included in figures for Iran's export of crude oil.

Reallocation of Investment Funds and Import Substitution. Sanctions compelled some Iranian manufacturers to increase domestic production of some goods as substitutes for imports. This trend was hailed by Iranian economists and Supreme Leader Khamene'i, who has long maintained that Iran should build a "resistance economy" less dependent on imports and foreign investment. In addition, some private funds flowed into the Tehran stock exchange and hard assets, such as property, although this trend generally benefitted only urban elites.

Partial Privatization/IRGC in the Economy. Over the past few years, portions of Iran's state-owned enterprises have been transferred to the control of quasi-governmental or partially private entities. Some of them are incorporated as holding companies, foundations, or investment groups. Based on data from the Iranian Privatization Organization, there are about 120 such entities that account for a significant proportion of Iran's GDP.99 Rouhani has sought to push the IRGC out of Iran's economy through divestment, to the extent possible. However, a substantial part of the economy remains controlled by government-linked conglomerates, including the IRGC. The IRGC's corporate affiliates are widely assessed as controlling at least 20% of Iran's economy, although there is little available information on the degree of IRGC-affiliated ownership stakes.

Subsidy Reductions. In 2007, the Ahmadinejad government began trying to wean the population off of generous subsidies by compensating families with cash payments of about $40 per month. Gasoline prices were raised to levels similar to those in other regional countries, and far above the subsidized price of 40 cents per gallon. Rouhani has continued to reduce subsidies, including by raising gasoline and staple food prices further and limiting the cash payments to only those families who could claim financial hardship. Rouhani also has improved collections of taxes and of price increases for electricity and natural gas utilities.100

Import Restrictions/Currency Controls. To conserve hard currency, Iran has at times reduced the supply of hard currency to importers of luxury goods, such as cars or cellphones, in order to maintain hard currency supplies to importers of essential goods. These restrictions eased after sanctions were lifted in 2016 but have been reimposed in 2018 to deal with economic unrest and the falling value of the rial.

Effect on Energy Sector Long-Term Development

The Iran Sanctions Act (ISA) was enacted in large part to reduce Iran's oil and gas production capacity over the longer term by denying Iran the outside technology and investment to maintain or increase production. U.S. officials estimated in 2011 that Iran had lost $60 billion in investment in the sector as numerous major firms pulled out of Iran. Iran says it needs $130 billion-$145 billion in new investment by 2020 to keep oil production capacity from falling.101 Further development of the large South Pars gas field alone requires $100 billion.102

During 2012-2016, there was little development activity at Iran's various oil and gas development sites, as energy firms sought to avoid sanctions (see Table 4). Some work abandoned by foreign investors was assumed by domestic companies, particularly those linked to the IRGC. However, the Iranian firms are not as technically capable as the international firms that have withdrawn. The lifting of sanctions in 2016 lured at least some foreign investors back into the sector, encouraged by Iran's more generous investment terms under a concept called the "Iran Petroleum Contract." That contract gives investing companies the rights to a set percentage of Iran's oil reserves for 20-25 years.103 Iran signed a number of new agreements with international energy firms since mid-2016 but, as noted in the tables and other information above, major energy firms have begun to divest in response to the U.S. exit from the JCPOA.

Sanctions relief also opened opportunities for Iran to resume developing its gas sector. Iran has used its gas development primarily to reinject into its oil fields rather than to export. Iran exports about 3.6 trillion cubic feet of gas, primarily to Turkey and Armenia. Sanctions have rendered Iran unable to develop a liquefied natural gas (LNG) export business, and derailed several gas ventures, including a BP-NIOC joint venture in the Rhum gas field (200 miles off the Scotland coast) and inclusion of Iran in planned gas pipeline projects to Europe. However, it was reported in March 2017 that the Philippine National Oil Company is seeking to build a 2-million-ton LNG plant in Iran, suggesting that patent issues do not necessarily preclude Iran from pursuing LNG.

Table 4. Post-1999 Major Investments in Iran's Energy Sector

Date

Field/Project

Company(ies)/Status (If Known)

Value

Output/Goal

Feb. 1999

Doroud (oil)

Total and ENI exempted from sanctions because of pledge to exit Iran

Total (France)/ENI (Italy)

$1 billion

205,000 bpd

Apr. 1999 Dec./May 2016

Balal (oil)

Initial development completed in 2004

Dec. 2016: Thailand PTTEP signed agreement with NIOC to study further development.

May 2016: KOGAS signed a memorandum of understanding (MoU) to assess the field.

Total/ Bow Valley (Canada)/ENI

Thailand PTTEP

KOGAS (South Korea)

$300 million

40,000 bpd

Nov. 1999

Soroush and Nowruz (oil)

Royal Dutch exempted from sanctions because of pledge to exit Iran market

Royal Dutch Shell (Netherlands)/Japex (Japan)

$800 million

190,000 bpd

Apr. 2000

Anaran bloc (oil)

Lukoil and Statoil invested in 2000 but abandoned work in 2009. As of Dec. 2016, Lukoil reportedly is considering returning to the project.

Lukoil (Russia) and Statoil (Norway)

$105 million

65,000

Jul. 2000

Phase 4 and 5, South Pars (gas)

On stream as of 2005. ENI exempted from sanctions based on pledge to exit Iran market

ENI exited in 2013 and doing so enabled the firm to be exempted from U.S. sanctions

ENI

Field in production

$1 billion

100,000 bpd

May 2002

Masjid-e-Soleyman (oil)

Sheer Energy (Canada)/CNPC (China))/ Naftgaran Engineering (Iran)

$80 million

25,000 bpd

Sept. 2002

Phase 9 + 10, South Pars (gas)

On stream as of early 2009

GS Engineering and Construction Corp. (South Korea)

$1.6 billion

2 billion cfd

Oct. 2002

Phase 6, 7, 8, South Pars (gas)

Field began producing late 2008; operational control handed to NIOC in 2009. Statoil exempted from sanctions upon pledge to divest

Statoil (Norway)

$750 million

3 billion cfd

Jan. 2004

Dec. 2016

Azadegan (oil)—South and North

Oct. 2010: original investor Inpex sold its stake and was exempted from ISA investigation. China National Petroleum Corp. took a majority stake in South and North Azadegan fields in January 2009. However, in 2014, Iran cancelled the contracts for for nonperformance

Dec. 2016: Royal Dutch Shell and Petronas signed a MoU to assess S. Azadegan for possibly taking the project over.

Inpex (Japan)

CNPC (China)

Royal Dutch Shell/Petronas (Malaysia)

$200 million (Inpex stake); China $2.5 billion

260,000 bpd

Jan. 2004

Tusan Block

Oil found in block in Feb. 2009, but not in commercial quantity, according to the firm.

Petrobras (Brazil)

$178 million

Oct. 2004

Dec. 2016

Yadavaran (oil)

In 2014, Iran says Sinopec has "experienced problems with regards to progress" on the field, which also extends into Iraq.

December 2016: Royal Dutch Shell signed MoU to assess taking over developing the field.

Deadline to finalize (May 2009) not met; firms submitted revised proposals to Iran in June 2009. State Department said on September 30, 2010, that Royal Dutch Shell and Repsol will not pursue this project any further.

Royal Dutch Shell, Repsol (Spain)

$4.3 billion

Mar. 2007

Esfahan refinery upgrade

Daelim (S. Korea)

NA

Jul. 2007

Phase 22, 23, 24—South Pars (gas)

Pipeline to transport Iranian gas to Turkey, and on to Europe and building three power plants in Iran. Contract not finalized to date.

Turkish Petroleum Company (TPAO)

$12. billion

2 billion cfd

Dec. 2007

Golshan and Ferdowsi onshore and offshore gas and oil fields and LNG plant

Project originally awarded to CNPC in 2010, but CNPC exited the project in October 2012. In July 2017, Total took over the project as operator, with CNPC as minority partner (30%). Iran's Petropars has a 20% stake as well.

Total SA (France) and CNPC (China), with Iran Petropars

$4.7 billion

2011

Azar Gas Field

Iran cancelled Gazprom's contract due to Gazprom's failure to fulfill its commitments.

Gazprom (Russia)

Dec. 2011

Zagheh Oil Field

Preliminary deal signed December 2011

Tatneft (Russia)

$1 billion

55,000 barrels per day

Jul. 2016

Aban Oil Field

Zarubezhneft signed a MoU to assess the field.

Zarubezhneft (Russia)

Jul. 2016

Paydar Garb Oil Field

Zarubezhneft signed a MoU to assess the field.

Zarubezhneft (Russia)

Nov. 2016

Parsi and Rag E-Sefid

Schlumberger signed a MoU to assess the fields.

Schlumberger (France)

Nov. 2016

South Pars Phase 11

Total has announced it will divest in response to U.S. reimposition of sanctions in 2018

Total SA (France)/CNPC (China) and Petropars

$4.8 billion

1.8 billion cu ft/day

Nov. 2016

Sumar Oil Field

Polish Oil and Gas Company (PGNiG) signed a MoU to assess the field for six months.

Sources: Various oil and gas journals, as well as CRS conversations with some U.S. and company officials. Some information comes from various GAO reports, the latest of which was January 13, 2015 (GAO-15-258R).

Note: CRS has no mandate, authority, or means to determine violations of the Iran Sanctions Act, and no way to confirm the status of any of the reported investments. The investments are private agreements between Iran and the firms involved, which are not required to reveal the terms of their arrangements. Reported $20 million+ investments in oil and gas fields, refinery upgrades, and major project leadership are included in this table. Responsibility for a project to develop Iran's energy sector is part of ISA investment definition.

Effect on Gasoline Availability and Importation

As the enactment of U.S. sanctions on the sale of gasoline to Iran became increasingly likely in 2010, several suppliers apparently stopped selling gasoline to Iran.104 Others ceased after the enactment of CISADA. Gasoline deliveries to Iran fell from about 120,000 barrels per day before CISADA to about 30,000 barrels per day immediately thereafter, although importation later increased to about 50,000 barrels per day. In 2017, Iranian officials said Iran had become largely self-sufficient in gasoline production.

Humanitarian Effects/Passenger Aircraft Safety

During 2012-2016, sanctions produced significant humanitarian-related effects, particularly in limiting the population's ability to obtain expensive Western-made medicines, such as chemotherapy drugs. Some of the scarcity was caused by banks' refusal to finance such sales, even though doing was not subject to any sanctions. Some observers say the Iranian government exaggerated reports of medicine shortages to generate opposition to the sanctions. Other accounts say that Iranians, particularly those with connections to the government, took advantage of medicine shortages by cornering the import market for key medicines.

Other reports say that pollution in Tehran and other big cities worsened because Iran produces gasoline itself with methods that cause more impurities than imported gasoline. As noted above, Iran's efforts to deal with environment hazards and problems might be hindered by denial of World Bank lending for that purpose.

In the aviation sector, some Iranian pilots complained publicly that U.S. sanctions caused Iran's passenger airline fleet to deteriorate to the point of jeopardizing safety. Since the U.S. trade ban was imposed in 1995, 1,700 passengers and crew of Iranian aircraft have been killed in air accidents, although it is not clear how many of the crashes, if any, were due to difficultly in acquiring U.S. spare parts.105

New Aircraft Sales

Sanctions relief ameliorated at least some of the humanitarian difficulties discussed above. In the aviation sector, several sales of passenger aircraft have been announced, and licensed by the Department of the Treasury, since Implementation Day. However, as noted, the licenses are being revoked and deliveries will not proceed beyond November 2018.

In February 2016, Iran Air—which was delisted from U.S. sanctions as of Implementation Day—announced it would purchase 118 Airbus commercial aircraft at an estimated value of $27 billion. Airbus received an OFAC license and three of the aircraft have been delivered. Airbus has said it will not deliver any more aircraft to Iran because its Treasury Dept. license is revoked.

In December 2016, Boeing and Iran Air finalized an agreement for Boeing to sell the airline 80 passenger aircraft and lease 29 others. Boeing received a specific license for the transaction. The deal has a total estimated value of about $17 billion, with deliveries scheduled to start later in 2018. The Boeing sale is to include 30 of the 777 model. None have been delivered, and Boeing officials have indicated that it will not proceed with deliveries now that the U.S. government has announced its export license is being revoked.

In April 2017, Iran's Aseman Airlines signed a tentative agreement to buy at least 30 Boeing MAX passenger aircraft. No U.S. license for this sale was announced prior to the U.S. exit from the JCPOA. The airline is owned by Iran's civil service pension fund but managed as a private company.

In June 2017, Airbus agreed to tentative sales of 45 A320 aircraft to Iran's Airtour Airline, and of 28 A320 and A330 aircraft to Iran's Zagros Airlines. No U.S. license for the sale was announced prior to the U.S. exit from the JCPOA.

ATR, owned by Airbus and Italy's Leonardo, sold 20 aircraft to Iran Air. It delivered eight aircraft by the time of the U.S. JCPOA exit. It reportedly has been given temporary U.S. Treasury Dept. licenses to deliver another five after thee August 6, 2018 initial sanctions reimposition in which its U.S. export licenses were to be revoked.

Post-JCPOA Sanctions Legislation

The JCPOA, its implications, and related Iran issues have been the subject of legislation. The JCPOA states that as long as Iran fully complies with the JCPOA, the sanctions that were suspended or lifted shall not be reimposed on other bases (such as terrorism or human rights).

Key Legislation in the 114th Congress

The Obama Administration stated that it would adhere to that provision but that some new sanctions that seek to limit Iran's military power, its human rights abuses, or its support for militant groups might not necessarily violate the JCPOA. During 2015-2016, supporters of the bills below asserted that they addressed weaknesses of the agreement or unrelated Iran issues, or increased oversight of the JCPOA.

The Iran Nuclear Agreement Review Act of 2015 (INARA, P.L. 114-17) provided for a 30- or 60-day congressional review period after which Congress could pass legislation to approve or to disapprove of the JCPOA, or do nothing. No such legislation of disapproval was enacted.

There are several certification and reporting requirements under INARA:

Material Breach Report. The President must report a potentially significant Iranian breach of the agreement within 10 days of acquiring credible information of such. Within another 30 days, the President must determine whether this is a material breach and whether Iran has cured the breach.

Certification Report. The President is required to certify, every 90 days, that Iran is "transparently, verifiably, and fully implementing" the agreement, and that Iran has not taken any action to advance a nuclear weapons program. The latest certification was submitted on July 17, 2017, and another one was due on October 15, 2017. On October 13, 2017, the Administration declined to make that certification, on the grounds that continued sanctions relief is not appropriate and proportionate to Iran's measures to terminate its illicit nuclear program (Section (d)(6)(iv)(I) of INARA).

If a breach is reported, or if the President does not certify compliance, Congress may initiate within 60 days "expedited consideration" of legislation that would reimpose any Iran sanctions that the President had suspended through use of waiver or other authority. That 60-day period is to expire on December 12, 2017.

Semiannual Report. INARA also requires an Administration report every 180 days on Iran's nuclear program, including not only Iran's compliance with its nuclear commitments but also whether Iranian banks are involved in terrorism financing; Iran's ballistic missile advances; and whether Iran continues to support terrorism.

Visa Restriction

The FY2016 Consolidated Appropriation (P.L. 114-113) contained a provision amending the Visa Waiver Program to require a visa to visit the United States for any person who has visited Iraq, Syria, or any terrorism list country (Iran and Sudan are the two aside from Syria still listed) in the previous five years. Iran argued that the provision represented a violation of at least the spirit of the JCPOA by potentially deterring European businessmen from visiting Iran. The Obama Administration issued a letter to Iran stating it would implement the provision in such a way as not to not impinge on sanctions relief, and allowances for Iranian students studying in the United States were made in the implementing regulations. Another provision of that law requires an Administration report to Congress on how Iran has used the benefits of sanctions relief.

President Trump has issued and amended executive orders that, in general, prohibit Iranian citizens (as well as citizens from several other countries) from entering the United States. This marked a significant additional restriction beyond the FY2016 Consolidated Appropriation.

Iran Sanctions Act Extension

The 114th Congress acted to prevent ISA from expiring in its entirety on December 31, 2016. The Iran Sanctions Extension Act (H.R. 6297), which extended ISA until December 31, 2026, without any other changes, passed the House on November 15 by a vote of 419-1 and then passed the Senate by 99-0. President Obama allowed the bill to become law without signing it (P.L. 114-277), even though the Administration considered it unnecessary because the President retains ample authority to reimpose sanctions on Iran. Iranian leaders called the extension a breach of the JCPOA,106 but the JCPOA's "Joint Commission" did not determine it breached the JCPOA.

Reporting Requirement on Iran Missile Launches

The conference report on the FY2017 National Defense Authorization Act (S. 2943, P.L. 114-328) contained a provision (Section 1226) requiring a quarterly report to Congress on Iran's missile launches the imposition of U.S. sanctions with respect to Iran's ballistic missile launches until December 31, 2019. The conference report on the FY2018 NDAA (P.L. 115-91) extended that reporting requirement until December 31, 2022. The report is to include efforts to sanction entities or individuals that assist those missile launches.

Other Legislation

Some Iran sanctions legislation in the 114th Congress appeared to be intended to address Iran's objectionable behavior, but was not enacted:

The Iran Policy Oversight Act (S. 2119) and the Iran Terror Finance Transparency Act (H.R. 3662) contained a provision that would add certification requirements for the Administration to remove designations of Iranian entities sanctioned. The House passed the latter bill but then vacated its vote.

The IRGC Terrorist Designation Act (H.R. 3646 and S. 2094) required a report on whether the IRGC meets the criteria for designation as a Foreign Terrorist Organization (FTO). The Obama Administration argued that the law that set up the FTO designations (Section 219 of the Immigration and Nationality Act [8 U.S.C. 1189]) applies such designations only to groups, rather than armed forces of a nation-state (which the IRGC is). Bills with similar provisions—H.R. 380, S. 67, and H.R. 478—have been introduced in the 115th Congress.

Prohibiting Assistance to Nuclear Iran Act (H.R. 3273) would prohibit the use of U.S. funds to provide technical assistance to Iran's nuclear program. The provision appeared to conflict with the provision of the JCPOA that calls on the P5+1 to engage in peaceful nuclear cooperation with Iran (Paragraph 32).

The Justice for Victims of Iranian Terrorism Act (H.R. 3457, S. 2086) would prohibit the President from waiving U.S. sanctions until Iran completed paying judgments issued for victims of Iranian or Iran-backed acts of terrorism. The House passed it on October 1, 2015, by a vote of 251-173, despite Obama Administration assertions that the bill would contradict the JCPOA.107

H.R. 3728 would amend ITRSHRA to make mandatory (rather than voluntary) sanctions related to the use by Iranian banks of electronic bank transfer systems such as SWIFT.

The IRGC Sanctions Act (H.R. 4257) would require congressional action to approve an Administration request to remove a country from the terrorism list and would require certification that any entity to be "delisted" from sanctions is not a member, agent, affiliate, or owned by the IRGC.

The Iran Ballistic Missile Sanctions Act of 2016 (S. 2725) would require that specified sectors of Iran's economy (automotive, chemical, computer science, construction, electronic, energy metallurgy, mining, petrochemical, research, and telecommunications) be subject to U.S. sanctions, if those sectors are determined to provide support for Iran's ballistic missile program. The provision appeared to violate the JCPOA by reimposing sanctions on major sectors of Iran's civilian economy. In the 115th Congress, S. 15 and key sections of S. 227 and H.R. 808 (Iran Nonnuclear Sanctions Act of 2017) mirror S. 2725.

Iran Terrorism and Human Rights Sanctions Act of 2016 (S. 2726) would add sanctions on Iran for its human rights abuses and its furnishing of weapons to Assad and other regional actors.

H.R. 4992, which passed the House on July 14, 2016, by a vote of 246-181, and the related Countering Iranian Threats Act of 2016 (S. 3267), would, among their central provisions, require foreign banks and dollar clearinghouses to receive a U.S. license for any dollar transactions involving Iran. That provision would appear to represent a new restriction on foreign transactions with Iran, and the Obama Administration opposed it as a violation of the JCPOA.

H.R. 5631, the Iran Accountability Act, which passed the House on July 14, 2016, by a vote of 246-179, would remove some waiver authority for certain provisions of several Iran sanctions laws and would require sanctions on sectors of Iran's civilian economy determined to have supported Iran's ballistic missile program. The latter provision appeared to contradict the JCPOA.

H.R. 5119, which passed the House by a vote of 249-176, would prohibit the U.S. government from buying additional heavy water from Iran and appeared intended to block additional U.S. purchases similar to one in April 2016 in which the United States bought 32 metric tons from Iran at a cost of about $8.6 million. The purchase helped Iran regain compliance with JCPOA stockpile requirements.

Several bills and amendments in the 114th Congress sought to block or impede the sale of the Boeing aircraft to Iran by preventing the licensing, financing, or Ex-Im Bank loan guarantees for the sale. These included H.R. 5715, H.R. 5711, and several amendments to the House version of the FY2017 Financial Services and General Government Appropriations Act (H.R. 5485). That act passed the House on July 7, 2016, by a vote of 239-185, and H.R. 5711 passed by the House on November 17, 2016, by a vote of 243-174. The Obama Administration opposed it as a JCPOA violation, and these provisions were not enacted.

The Trump Administration and Iran Sanctions Legislation

With the threat of a Trump Administration pullout from the JCPOA looming, Congress acted on or considered additional Iran sanctions legislation. Still, the sanctions laws adopted appeared to avoid violating U.S. JCPOA commitments. Now that the Trump Administration has decided to exit the pact, there might be increased potential for Congress to consider legislation that sanctions those core Iranian economic sectors that could not be sanctioned under the JCPOA. The following sections discuss some Iran sanctions legislation enacted or under consideration in the 115th Congress.

A bill, S. 722, which initially contained only Iran-related sanctions, was reported out by the Senate Foreign Relations Committee on May 25, 2017. After incorporating an amendment adding sanctions on Russia, the bill was passed by the Senate on June 15, 2017, by a vote of 98-2. A companion measure, H.R. 3203, was introduced in the House subsequent to the Senate passage of S. 722, and contained Iran-related provisions virtually identical to the engrossed Senate version of S. 722. Following a reported agreement among House and Senate leaders, H.R. 3364, with additional sanctions provisions related to North Korea (and provisions on Iran remaining virtually unchanged from those of the engrossed S. 722), was introduced and passed both chambers by overwhelming margins. President Trump signed it into law on August 2, 2017 (P.L. 115-44), accompanied by a signing statement expressing reservations about the degree to which some provisions, particularly those pertaining to Russia, might conflict with the President's constitutional authority.

CAATSA's Iran-related provisions are analyzed above. Overall, CAATSA does not appear to conflict with the JCPOA insofar as it does not reimpose U.S. secondary sanctions on Iran's civilian economic sectors. The JCPOA did not require the United States to refrain from imposing additional sanctions—as CAATSA does—on Iranian proliferation, human rights abuses, terrorism, or the IRGC. Section 108 of CAATSA requires an Administration review of all designated entities to assess whether such entities are contributing to Iran's ballistic missile program or contributing to Iranian support for international terrorism. No entities promised to be delisted by the United States in October 2023, under the JCPOA, appear to fall into these categories, and the section would therefore not appear to preclude delisting any entities as required.

Selected Additional Pending Legislation

H.R. 1698. The Iran Ballistic Missiles and International Sanctions Enforcement Act, introduced by House Foreign Affairs Committee Chairman Ed Royce, passed the House on October 26, 2017, by a vote of 423-2. It would amend the remaining active (not waived) section of ISA (Section 5b) to clarify that assistance to Iran's ballistic missile program is included as subject to sanctions. The provision would apply the sanctions to foreign governments determined to be assisting Iran's missile programs, and would apply several ISA sanctions to foreign entities, including foreign governments, that sell to or import from Iran the major combat systems banned for sale to Iran in Security Council Resolution 2231. This represents a more specific list of banned items than the "destabilizing numbers and types" of weaponry the sale to Iran of which can be sanctioned under ISA and several other U.S. laws discussed above.

H.R. 1638. On November 14, the House Financial Services Committee ordered reported H.R. 1638, the Iranian Leadership Asset Transparency Act, requiring the Treasury Secretary to report to Congress on the assets and equity interests held by named Iranian persons including the Supreme Leader, Rouhani, various IRGC and other security commanders, and members of various leadership bodies.

H.R. 4324. On November 14, the House Financial Services Committee also ordered reported the Strengthening Oversight of Iran's Access to Finance Act. The bill would require Administration reports on whether financing of Iranian commercial passenger aircraft purchases pose money-laundering or terrorism risks or benefit Iranian persons involved in Iranian proliferation or terrorism. Some experts argue that the bill might potentially act as a brake on the willingness of the Treasury Department to license aircraft sales to Iran, and in so doing possibly cause Iran to accuse the United States of breaching its JCPOA commitment for the United States to sell such aircraft to Iran.108

Following President Trump's October 13, 2017, statement on Iran, Senate Foreign Relations Committee Chairman Bob Corker and Senator Tom Cotton released an outline of legislation that would reimpose waived U.S. sanctions if, at any time—including after JCPOA restrictions expire—Iran reconstitutes aspects of its nuclear program that were limited or dismantled under the JCPOA. The bill draft included sanctions triggers based on Iranian missile developments. Secretary of State Tillerson told journalists on January 5, 2018, that he was continuing to work with Senator Corker and others on legislation that might satisfy President Trump's January 12, 2018, demand that the weaknesses of the JCPOA must be addressed if he is to keep the United States in the JCPOA.109 Such legislation has not been introduced to date.

H.R. 5132. The Iranian Revolutionary Guard Corps Economic Exclusion Act. This bill mandates Administration reports on whether specified categories of entities are owned or controlled by the IRGC, or conduct significant transactions with the IRGC. The bill would define an entity as owned or controlled by the IRGC even if the IRGC's ownership interest is less than 50%—a lower standard than the usual practice in which ownership is defined as at least 50%. The bill requires Administration investigation of several specified entities as potentially owned or controlled by the IRGC, including several telecommunications, mining, and machinery companies. The bill also requires a report on whether the Iran Airports Company violates E.O. 13224 by facilitating flight operations by Mahan Air, which is a designated SDN under E.O. 13224. Whereas the bill's provisions do not mandate any sanctions on entities characterized within, the bill appears to establish a process under which the Administration could name as SDNs entities in Iran's civilian economic sectors, including civil aviation. If civilian sector entities are named as SDNs, Iran might assert that the spirit, and possibly also the letter, of the JCPOA has been breached.

There are a number of other possible sanctions that might receive consideration—either in a global or multilateral framework. These possibilities are analyzed in CRS In Focus IF10801, Possible Additional Sanctions on Iran, by [author name scrubbed].

Table 5. Entities Sanctioned Under U.N. Resolutions and U.S. Laws and Executive Orders

Persons listed are identified by the positions they held when designated; some have since changed. For U.S. executive order, names in italics are entities and individuals that were delisted to implement the JCPOA. Entities in boldface were to be delisted on Transition Day (October 2023). However, all delisted entities will be relisted on November 5, 2018, and no entities to be delisted will be delisted.

U.N. Security Council Resolutions

Entities in italics were "delisted" on Implementation Day. Entities in standard font to remain listed until Transition Day (October2023), unless removed earlier by Security Council

* Bank Sepah and Bank Sepah International were delisted on Implementation Day by a separate decision the Security Council. They were not named on the Resolution 2231 attachment of entities to be delisted on that day. No information has been publicized whether Ahmad Derakshandeh, the head of Bank Sepah, was also delisted.

Entities Added by Resolution 1803 (resolution no longer active)

Requires that countries report when the following persons enter or transit their territories:

SAD Import Export Company (also designated by U.N. Sanctions Committee a few days earlier for violating Resolution 1747 ban on Iran arms exports, along with Yas Air) for shipping arms and other goods to Syria's armed forces; Marine Industries Organization—designated for affiliation with Iran Ministry of Defense and Armed Forces Logistics; Mustafa Esbati, for acting on behalf of Marine Industries; Chemical Industries and Development of Materials Group—designated as affiliate of Defense Industries Org.; Doostan International Company—designated for providing services to Iran Aerospace Industries Org, which oversees Iran missile industries.

Iranian-Venezuelan Bi-National Bank (IVBB), for activities on behalf of the Export Development Bank of Iran that was sanctioned on October 22, 2008 (see above). EDBI was sanctioned for providing financial services to Iran's Ministry of Defense. Aluminat, for providing centrifuge components to Kalaye Electric Co.

By State: Organization of Defensive Innovation and Research (nuclear esearch); Nuclear Science and Technology Research Institute (implements nuclear projects including heavy water reactor at Arak); Jahan Tech Rooyan Pars: and Mandegar Baspar Kimiya Company (latter two are involved in procuring carbon fiber for proscribed aspects of Iran's nuclear program).

Nine individuals and entities, disrupted by U.S.-UAE joint action, attempting to acquire dollars in UAE to provide to the IRGC-QF: Individuals: Mas'ud Nikbakht, Sa'id Najafpur, and Mohammad Khoda'i, for financial activities on behalf of the IRGC-QF; Mohammadreza Valadzaghard, Meghdad Amini, and Foad Salehi, for providing material support, including illicit financial assistance, to the IRGC-QF. Entities: Jahan Aras Kish, a front company involved in transferring and converting funds for the IRGC-QF, Rashed Exchange, for converting currency for the IRGC-QF, and Khedmati and Company Joint Partnership, for being owned by Khedmati and Khoda'i.

Total SA (France); Gazprom (Russia); and Petronas (Malaysia)—$2 billion project to develop South Pars gas field. ISA violation determined but sanctions waived in line with U.S.-EU agreement for EU to cooperate on antiterrorism and antiproliferation issues and not file a complaint at the WTO. Then-Secretary of State Albright, in the May 18, 1998, waiver announcement indicated that similar future such projects by EU firms in Iran would not be sanctioned. (http://www.parstimes.com/law/albright_southpars.html). Violation determined but sanctions waived.

Sanctioned under CISADA amendment to ISA imposing sanctions for selling gasoline to Iran or helping Iran import gasoline. Allvale Maritime and SAMAMA determinations were issued on September 13, 2011, to "clarify" the May 24 determinations that had named Ofer Brothers Group. The two, as well as Tanker Pacific, are affiliated with a Europe-based trust linked to deceased Ofer brother Sami Ofer, and not Ofer Brothers Group based in Israel. Firms named subjected primarily to the financial sanctions provided in ISA. U.S.-based subsidiaries of PDVSA, such as Citgo, were not sanctioned. Sanctions lifted under JCPOA.

Sanctioned under ISA provision on owning vessels that transport Iranian oil or providing insurance for the shipments. Treasury sanctions also imposed on eight UAE-based oil traders that concealed the transactions. Sanctions lifted under JCPOA.

Mar. 14, 2013

Tanker Pacific; SAMAMA; and Allvale Maritime

Sanctions lifted. Special rule applied after "reliable assurances" they will not engage in similar activity in the future.

These persons are named in a semiannual report to Congress, required under CISADA. Virtually all of the persons on this list, and those listed under Executive order 13628 (below) are designated as human rights abusers by the European Union, whose list contains 87 individuals, including several province-level prosecutors

One person: Ashgar Mir-Hejazi for human rights abuses on/after June 12, 2009, and for providing material support to the IRGC and MOIS.

May 30, 2013

One entity: Abyssec, for training the IRGC in cyber tradecraft and supporting its development of offensive information operations capabilities.

December 30, 2014

One entity and One person: Tehran Prisons Organization. For severe beating of prisoners at Evin Prison in April 2014; Sohrab Soleimani (brother of IRGC-QF commander) as head of Tehran Prisoners Organization at the time of the attack above. Heads State Prisons Organization.

April 13, 2017

Persons and entities designated following repression of December 2017-January 2018 protests: Judiciary head Sadeq Amoli Larijani (highest-ranking Iranian official sanctioned by the United States); Rajaee Shahr Prison; and Gholmreza Ziaei

Entities Named as Iranian Government Entities Under Executive Order 13599 (February 5, 2012)

Hundreds of entities—many of which are names and numbers of individual ships and aircraft—are designated under this Order, or were earlier designated as entities owned or controlled by the government of Iran (and were subsequently added to the 13599 list). The full list can be accessed at: https://www.treasury.gov/ofac/downloads/13599/13599list.pdf

Below are selected entities that were designated as Iran owned or controlled before and after the issuance of E.O. 13599. Those in italics were delisted for secondary sanctions, but remain designated as entities with which U.S. persons are prohibited from conducting transactions.

Six individuals including Seyed Nasser Mohammad Seyyedi, director of Sima General Trading who is also associated with NIOC and NICO. The other 5 persons sanctioned manage firms associated with NIOC and NICO.

Four businesses used by Seyyedi to assist NIOC and NICO front companies: AA Energy FZCO; Petro Royal FZE; and KASB International LLC (all in UAE); and Swiss Management Services Sarl.

Committee to Determine Instances of Criminal Content for engaging in censorship activities on/after June 12, 2009; Ofogh Saberin Engineering Development Company for providing services to the IRGC and Ministry of Communications to override Western satellite communications.

Douran Software Technologies, for acting on behalf of the Committee to Determine Instances of Criminal Content (see above).

December 30, 2014

Two entities that blocked social media sites and websites: Supreme Council for Cyberspace, and National Cyberspace Center

January 12, 2018

IRIB Director General Abdulali Ali-Asgari (see above); Abolhassan Firouzabadi (Secretary of the Supreme Council of Cyberspace); and Abdolsamad Khoramabadi (Secreary of the Committee to Determine Instances of Criminal Conduct, which oversees the censorship of the Internet)

Four individuals/entities: Ajily Software Procurement Group, Andisheh Vesal Middle East Company, Mohammed Saeed Ajily, and Mohammed Reza Rezkhah. For stealing engineering software programs from U.S. and other Western firms and selling them to Iranian military and government entities.

Eight individuals/entities: ITSec Team, for 2011-12 distributed denial of services attacks on U.S. banks, acting on behalf of the IRGC; and Ahmad Fathi, Amin Shokohi, and Hamid Firoozi (for working for or with ITSec). Four persons working for or with Mersad Co, an IRGC-affiliate firm indicted in 2016 for computer disruption/botnet/malware activities in 2012-13 targeting 24 U.S. financial sector companies: Sadegh Ahmazadegand; Sina Keissar; Omid Ghaffarinia; and Nader Saedi.

Footnotes

On November 13, 2012, the Administration published in the Federal Register (Volume 77, Number 219) "Policy Guidance" explaining how it implements many of the sanctions, and in particular defining what products and chemicals constitute "petroleum," "petroleum products," and "petrochemical products" that are used in the laws and executive orders discussed below. See http://www.gpo.gov/fdsys/pkg/FR-2012-11-13/pdf/2012-27642.pdf.

The executive order was issued not only under the authority of IEEPA but also the National Emergencies Act (50 U.S.C. 1601 et seq.; §505 of the International Security and Development Cooperation Act of 1985 (22 U.S.C. 2349aa-9) and §301 of Title 3, United States Code.

As amended by CISADA (P.L. 111-195), these definitions include pipelines to or through Iran, as well as contracts to lead the construction, upgrading, or expansions of energy projects. CISADA also changes the definition of investment to eliminate the exemption from sanctions for sales of energy-related equipment to Iran, if such sales are structured as investments or ongoing profit-earning ventures.

Under §4(d) of the original act, for Iran, the threshold dropped to $20 million, from $40 million, one year after enactment, when U.S. allies did not join a multilateral sanctions regime against Iran. P.L. 111-195 explicitly sets the threshold investment level at $20 million. For Libya, the threshold was $40 million, and transactions subject to sanctions included export to Libya of technology banned by Pan Am 103-related Security Council Resolutions 748 (March 31, 1992) and 883 (November 11, 1993).

The original ISA definition of energy sector included oil and natural gas, and CISADA added to that definition liquefied natural gas (LNG), oil or LNG tankers, and products to make or transport pipelines that transport oil or LNG.

Other ISA amendments under that law included recommending against U.S. nuclear agreements with countries that supply nuclear technology to Iran and expanding provisions of the USA Patriot Act (P.L. 107-56) to curb money-laundering for use to further WMD programs.

This termination requirement added by P.L. 109-293 formally removed Libya from the act. Application of the act to Libya terminated on April 23, 2004, with a determination that Libya had fulfilled U.N. requirements.

The act originally only applied to advanced conventional weapons. The extension to WMD, defined as chemical, biological, or nuclear weapons-related technology was added by the FY1996 National Defense Authorization Act (P.L. 104-106).

The provision contains certain exceptions to ensure the safety of astronauts, but it nonetheless threatened to limit U.S. access to the international space station after April 2006, when Russia started charging the United States for transportation on its Soyuz spacecraft. Legislation in the 109th Congress (S. 1713, P.L. 109-112) amended the provision in order to facilitate continued U.S. access and extended INA sanctions provisions to Syria.

Security Council resolutions that reference Chapter VII of the U.N. Charter represent actions taken with respect to threats to international peace and acts of aggression. Article 41 of that Chapter, in general, provides for enforcement of the resolution in question through economic and diplomatic sanctions, but not through military action.

Note: CRS has no mandate or capability to "judge" compliance of any country with U.S. or other sanctions against Iran. This section is intended to analyze some major trends in third country cooperation with such sanctions.

During the active period of talks, which began in December 2002, there were working groups focused not only on the TCA terms and proliferation issues but also on Iran's human rights record, Iran's efforts to derail the Middle East peace process, Iranian-sponsored terrorism, counter-narcotics, refugees, migration issues, and the Iranian opposition PMOI.

"Worldwide Threat Assessment of the U.S. Intelligence Community." Testimony before the Senate Select Committee on Intelligence. May 11, 2017. This language was not contained in the 2018 version of the testimony.

An Iranian letter to the U.N. Security Council submitted July 20, 2015, indicates Iran's view that "reintroduction or reimposition, including through extension, of the sanctions and restrictive measures will constitute significant nonperformance which would relieve Iran from its commitments in whole or in part." Iran Letter to the President of the U.N. Security Council, July 20, 2015, (S/2015/550).